How Long Can Council Tax Debt Be Chased?

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How Long Can Council Tax Debt Be Chased?

In 2019, UK Councils reported that at least 1.3 million households had dropped behind in their Council tax debts. It is no surprise, then, that taxpayers wonder . The high costs of Council debt collections increase errant taxpayers' peril of falling deeper into debt. Before the impact of COVID-19, UK households owed £3.2 billion in unpaid Council tax debts. The COVID-19 pandemic in 2020 has only aggravated the situation.

When a debt collector contacts you, you must conduct diligent research. You must determine:

  1. If you are the person who owes the debt.
  2. Whether you have already paid the debt.
  3. What steps you can take to remedy the arrears.

It is frustrating and time-consuming to handle debt collectors on your own. Never fear! DoNotPay is here. DoNotPay is the automated, web-based, user-friendly platform that helps you take the stress out of contacts by debt collectors.

What Happens if I Don’t Pay My Council Tax Debt?

If you fall behind in your Council tax debt, you may find yourself liable for the total annual bill instead of the regular monthly payments. Then, the Council adds court fees and bailiff charges to the debt amount. Just as an example, a taxpayer may find they no longer owe £167 but £2,000 or more after a few weeks. Bailiffs often use court actions to collect Council tax debts even for small amounts owed.

Council tax debts are priority debts because the Council has supreme powers to collect those debts. You should pay your priority debt before other household debt, including mortgages or credit cards. Council tax debt becomes after six years from the last payment you made. It is critical to note, however, that councils rarely let this happen.

How Long Can Debt Collectors Chase Me for My Tax Debt?

The Limitations Act of 1980 limits the that creditors may pursue you for various types of debts. The time limit for household debt is six years from the last payment you made. Missed mortgage payments have a 12-year limitation. The law only applies if you made no payments during the limitation period, and never acknowledged that you owe the debt.

Council tax debt collectors do not allow the limitation period to run out. In practice, bailiffs go to court to obtain a liability judgment whereby the court formally decides you owe the money. The bailiffs may enforce the judgment at any time and avoid the six-year statute of limitations.

How Do the Bailiffs Enforce the Priority Debt?

The bailiffs often ask a Magistrate's Court to issue a judgment of liability against taxpayers who are in arrears for Council taxes. Once the court issues the judgment, the time-barred laws no longer apply to the arrears. The Council may enforce the Magistrate's Court judgment against you at any time.

If you do not pay your tax arrears, the Council may:

  • Seize your goods to pay off the debt,
  • Freeze your bank accounts,
  • Deduct the amount you owe from the proceeds of any sale of property,
  • Assess court costs and attorneys' fees against you, and
  • Reduce your benefits to pay back the arrears, such as your Employment Allowance, Universal Credit, Job Seekers' Allowance, or your Pension.

How to Get Debt Payment Assistance

If you cannot pay your tax debt, options exist to pay off your debt or to obtain a debt relief order.Make installment payments;

Change the terms of the payments via an N245 application; or

Obtain a Debt Relief Order.

You may obtain a debt relief order from an officer of the bankruptcy court through an authorized debt adviser.Debts less than £5,000;

Little spare income; and

Do not own a home.

If you successfully obtain a debt relief order, the debt collectors may not obtain the money you owe without the court's permission.

Get Debt Help With DoNotPay!

Whether debt collectors recently contacted you or has been harassing you for months, DoNotPay can help you determine whether your debt collector complies with debt collection laws. After answering a series of questions, DoNotPay will guide you to the best possible course of action.

If you choose to report the collection agent to a governing body, DoNotPay will file the complaint on your behalf. This innovative platform provides a fast and easy way to handle debt collectors through a three-step process:

  1. Search “debt collection” on DoNotPay.

  2. Answer a series of questions about the debt collectors, including when you were contacted and how you were contacted, so we can determine if they have violated any debt collection laws.

  3. Decide which course of action you want to take based on our guidance, such as filing a debt verification request, demanding for the collectors to stop contacting you, or reporting them to a professional trade association.

Can DoNotPay Help With Other Debt Collectors?

DoNotPay works across all collection agencies in the UK. Should you be caught in a bind with other debt collectors, we can definitely assist.

Here are only a few companies we’ve dealt with in the past:

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