Paying your council tax isn’t a choice. It’s a mandatory charge – one that, in England and Wales, can land you in prison for non-payment. Imprisonment for non-payment of council tax in Scotland isn’t legal, but council tax debts can lead to bailiffs, bankruptcy and repossession of your home, as 37 people in Dundee discovered recently.
So What Can You Do If Your Struggling To Repay Council Tax Debt?
Don’t Ignore The Debt Letters
If you miss a council tax payment you’ll receive a reminder letter. If the missed payment occurred as the result of temporary glitch (eg you overshot your overdraft limit for a day or two), pay the debt now.
Bear in mind, even this one late payment could damage your credit rating (although that’s unlikely to happen if you pay within seven days of the reminder. To tell if that’s the case you’ll need to wait a few weeks for the late payment to filter through to your credit rating, then check with a credit reference agency to see if there are any ‘black marks’ against your name.
If there are, look at ways to improve your credit rating again to prevent it causing problems in the future.
If you’re unable to pay within seven days of the reminder you’ll probably lose your ability to pay by monthly installment at this point unless you contact the council and explain your situation.
Negotiating with the creditors of any debt is always a good idea, and if you can manage to pay something back, call the council and talk to them about spreading the payments to help you get out of debt. The council isn’t obliged to accept your offer, but they will usually try.
Avoiding The Bailiffs
If you can’t reach an agreement or make a payment that satisfies the council, they will try to take what you owe from benefits or earnings (under what’s known as a ‘charge for payment order’. If you still can’t pay at that point the local authority will contact the sheriff officer, who acts as bailiff and debt collector.
Once a sheriff officer is involved, they will be able to take the money either from your bank account (including a joint account), from your earnings – and they’ll contact your employer direct to do this, or they will recover the amount owed by taking items from your home.
Remember that, once a sheriff officer is involved, their costs will be added to the total debt, as will the repair costs of any damage they cause entering your property to recover goods.
So if you are struggling with council tax debt, waiting and letting things run their cause will only add to that debt. It’s always a better option to consider your debt management options at or before final notice stage.
The Scottish Trust Deed Debt Solution
In our experience, debt problems tend not to be restricted to one creditor. If you’re having problems paying the council tax, chances are you’ll need debt help in other areas too. If your debts amount to more than £6,000, a Scottish Trust Deed (the equivalent of an Individual Voluntary Arrangement in the rest of the UK) can help you get out of debt (council tax and everything else) in one simple process.
To arrange a Scottish Trust Deed, you’ll need to talk to a licensed insolvency practitioner like ScottishTrustDeed.co.uk. An advisor will talk to you about your council tax (and other) debt to establish whether a Scottish Trust Deed is the best debt management solution for you.
If it is, the advisor will work out how much you can afford to pay your creditors after living expenses have been deducted. Providing you can afford to pay a regular monthly amount for a minimum of 4 years, and assuming the creditors accept, your creditors will no longer be able to chase you for payment, and you will escape bankruptcy.
By the time you reach the end of your Scottish Trust Deed’s activation period, the repayments you’ve made will be taken in full and final settlement of the debts covered by the Deed, and the outstanding amounts will be wiped.
Will My Council Agree To A Scottish Trust Deed Debt Solution?
They don’t have to, but like all creditors they will usually prefer to receive something rather than nothing. A Scottish Trust Deed – or another suitable Debt Arrangement Scheme or Minimal Asset Process – can ensure this happens.
Get out of debt for good. If you’re struggling to pay council tax and other debts, give yourself the breathing room to get back on track with a Scottish Trust Deed.
Trust Deed Example
Example Unsecured Debts
|2||Credit card 1||£6,812|
Your Monthly Repayments Would Be
a Scottish Trust Deed £748
(total contractual repayments)
a Scottish Trust Deed £295
(total contractual repayments)
* Subject to creditor acceptance
* Payment subject to individual circumstances
* Credit rating may be affected
* Fees apply, subject to individual's circumstances. For more information on our fees click here