Council Tax Debts and Individual Voluntary Arrangement

This debt solution is available for individuals in England and Wales only.

Your council tax as a priority debt is considered as one of the most important bills to pay. If you’re on IVA or individual voluntary arrangement, your council tax payment will be included in your IVA payment every month.

Once your council tax is included in your individual voluntary arrangement, you don’t need to worry about your council tax arrears since your IVA provider will make sure that every amount you owe is covered while on IVA.

Council Tax as A Priority Debt

You might be wondering why you need to pay your council tax before your unsecured debts. This is because the council tax is considered as one of the priority debts. This means it is highly important due to the consequences of ignoring your obligations and taking it seriously.

Moreover, local authorities possess legal powers to recover what you owe in case you missed paying your council tax. Their jurisdiction or the scope of their power can lead to:

  • bailiffs visiting your home or property to recover debts
  • attachment of earnings, where the money you owe will be deducted from your wage
  • imposing a charging order if you own your home. A way to secure debt.
  • your bankruptcy
  • your imprisonment if you deliberately refuse to pay your debt or culpable neglect

Why Should IVA Includes Council Tax?

Your latest council tax bill is classified as one of the debt that must be included in your list of creditors. This happens if you live alone and the council tax bill is under your name solely. Another case is when you started an IVA with your partner. So when proposing any debt relief solutions, your council tax bill is likely to be included.

What Should I Do If Council Tax Is Included In My IVA?

During the first few months of your IVA, the council will submit their claim for the council tax bill. When this occurs, you must keep on paying for your council tax bill as usual. The only time you adjust the payment is when you get a written confirmation that their claim has been agreed. If this happens, you will no longer make succeeding payments to the council.

This decision might affect you in the first year of your IVA. While if you are issued for a council tax bill after the start of your IVA, you may need to pay it directly as what you normally do.

IVA Advice and Tips

If you want to maintain confidentiality and privacy when seeking debt advice, contact us. Our skilled experts can help you answer all that you need to know about how IVA works. Besides, we can help you determine whether an IVA is a suitable debt solution for you.