Does debt management include Council Tax arrears?
If you have Council Tax arrears and other debts, a debt management plan might be able to help.
Because failing to pay Council Tax could carry serious consequences, Council Tax arrears are considered a 'priority' expense. When you apply for debt management, we look at your income and priority expenses to work out how much you have left over to put towards your unsecured debts.
We make sure people on debt management can pay priority expenses first and use what's left over to repay their problem unsecured debts.
How can this debt solution help?
A debt management plan is an informal arrangement between you and your lenders when you can't afford your repayments anymore. It involves making an agreement to put all your disposable income (after essential living costs) on your unsecured debts every month. This means you'll be repaying your debts for longer, but in affordable instalments.
A debt management company can act on your behalf and negotiate lower payments with your unsecured lenders, usually for a fee.
Lowering your repayments would be recorded on your credit record. However, it's worth remembering that if you can only afford your repayments by lowering them, then a damaged credit record can't really be helped.
You would need to have a repayment arrangement in place with your Council for repaying your arrears before we could start a debt management plan for you, as the debt management plan cannot include these arrears.
Contact your council as soon as you become aware that there is a problem and find out whether you are entitled to any Council Tax benefit.
Things to be aware of when on debt management
Lowering your repayments can leave you in debt for longer. Some lenders may agree to freeze interest and charges - which can really help to bring the debt back to an affordable level - but not all of them do this. While debt management does leave people in debt for longer, it does give them the time to repay their debts in full without impacting on their ability to meet essential expenses.
If you want to arrange a debt management through us, we could talk to your unsecured lenders to negotiate lower payments.
What happens if I don't pay my Council Tax?
If you don't pay your Council Tax, the Council can issue a 'Liability Order' from the Magistrates Court with costs on top. You may have to attend court. If you still don't pay, the Council can take further action, such as sending bailiffs to your home, deducting payments from your wages or benefits, or applying for your bankruptcy.
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