Notice of defaults: everything you need to know
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Council tax is now the most common cause of debt problems, and one in eight adults say they missed at least one payment in the last year.
One in eight UK adults say they have missed at least one council tax payment in the last 12 months, according to new research carried out for us. The news comes as Citizens Advice announced** that council tax is now the most common debt problem in Britain, overtaking credit card debt.
The charity said that it expects to deal with 191,400 cases of council tax debt in the year 2014-15, a 20% increase on the previous year. The findings show that more people are getting into financial difficulties over everyday household bills rather than debt problems such as unsecured loans or credit cards.
Missing the bill
Our research found that of those who say they didn’t make all of their council tax payments this year, a third say they only missed one instalment. Another one in three have missed two payments, but one in eight are really struggling with their council tax bill, as they have missed five or more instalments.
Despite the rise in council tax debt problems, it seems that not everyone is aware of how important it is to pay their bills. When those who had missed a council tax payment were asked what they thought the consequences of this could be, just a quarter knew that you can be sent to prison if you refuse to pay. Two in five say they think that the council will just chase them for the money, and a fifth think that nothing will happen if they don’t pay their council tax bill. Council tax payments are regarded as a priority bill, so they should be paid before some other less priority debts, such as credit card bills or unsecured loans.
If you’re trying to manage various debts and payments every month, it can be helpful to sort all your outgoings into priority and non-priority debts, so you can see which bills you should pay first. Priority debts can have more serious implications if you don’t pay them, such as your heating or electricity being cut off or your home being repossessed. To find out more about priority and non-priority debts, check out our guide here.
One in 10 think that not paying council tax bills can affect their credit rating, which isn’t actually true. Councils don’t share information about your council tax bills with the credit report companies, so don’t worry about getting a black mark on your credit report if you’ve been having trouble making your payments.
Struggling with payments?
If you’re genuinely having problems paying your council tax bill, don’t panic. It’s important to remember that the most extreme measures, such as a prison sentence, are only ever applied to those who can pay their bill, but refuse to do so. Before it got to this stage, an attachment of earning would be applied to recover any outstanding money anyway, meaning it would be taken from your benefits or salary. Prison sentences would not be applied to those who are simply unable to pay, as you can’t be put in prison just for being in debt in the UK.
As soon as you start to have trouble with your council tax payments, get in touch with the council to let them know that you’re struggling. They may be able to arrange to spread your instalments over 12 months, instead of the usual 10, to make your payments more manageable, or you could get a one-off discount so you’ll be able to afford to pay what you owe. You should also check if you’re eligible to get a discounted council tax bill if you’re a student, disabled, on a low income or receiving benefits.
However, your council tax debts may indicate that you’re having wider financial issues. As the stats from Citizens Advice shows, the cost of living is becoming increasingly unmanageable for some people. If your everyday bills and debts are getting on top of you, it might be worth seeking help or advice. Talking to a debt specialist, such as the ones at the Debt Advisory Centre, could help you start to see a way through your debt problems, and get back in control of your finances.
*OnePoll questioned a nationally representative sample of 2,000 adults aged 18 and over between 19th December and 30th December 2014, of whom 635 were in Scotland.
by Christine WalshBack to blog home