As we move into the new financial year, many households across the nation are facing up to updated council tax bills, only to find a harsh reality staring back at them.
With the looming threat of council tax debts, Creditfix, the UK’s leading personal insolvency provider, is sounding the alarm on the hidden pitfalls of falling behind on these payments.
It’s no secret that local authorities are feeling the squeeze, especially those overseeing social care in England. As April approaches, nearly all are preparing to implement the maximum council tax increase allowable by law.
According to recent findings by the County Councils Network (CCN), a staggering 95% of county and unitary local authorities in England intend to raise council tax by the maximum percentage of 4.99%.
The stories emerging from households grappling with these increases paint a stark picture. For many, the threat of council tax arrears looms large, pushing them to the brink of financial collapse. Against the backdrop of a staggering national debt level of £19,145, maintaining long-term financial sustainability has never been more crucial.
Maxine McCreadie, a personal finance expert at Creditfix, warns against the temptation to cut back on council tax payments as a temporary fix.
She said: “It’s crucial for people facing money struggles to recognise that cutting back on council tax payments may seem like a temporary solution, but it can result in long-lasting consequences.”
Maxine stresses the importance of seeking support if financial difficulties arise. Local councils may be willing to negotiate different repayment plans or spread payments over a more manageable timeframe. However, ignoring the issue can lead to a cascade of negative repercussions.
Here are five key points to consider when dealing with council tax debt:
- Two warnings: Councils typically issue two reminder notices before taking further action. Failure to respond can result in a final notice demanding payment for the entire year's council tax.
- Bailiff involvement: Non-payment can escalate to bailiff involvement, adding stress to an already challenging situation.
- Increased debt: Unpaid council tax doesn't vanish; it accrues additional fees and interest, potentially leading to legal action.
- Credit score impact: Defaulting on council tax payments can damage credit scores, hindering future financial opportunities.
- Court proceedings: Persistent non-payment may lead to court proceedings, further exacerbating the financial burden and potentially resulting in severe consequences.
We always urge proactive engagement with council tax obligations and encourage individuals to seek assistance from local authorities or financial advisors to navigate these challenges.
In the face of rising council tax and mounting debts, it's essential to confront these issues head-on rather than letting them spiral out of control. By taking action early and exploring available support options, individuals can mitigate the risks and pave the way toward financial stability.