Liability Orders and powers to recover your debt
Once granted a Liability order for non-payment of your Council Tax, the Council can take various actions to recover your debt:
- Liability Orders
- Request for Information
- Attachment of Income Support, Jobseekers Allowance, Employment and Support Allowance or Universal Credit
- Attachment of Earnings
- Attachment of Councillors' Allowances
- Enforcement Action
- Charging Order
In court, the council applies to the magistrate for a liability order. This means the council will ask the court to decide if you are responsible for paying the Council Tax
Once a liability order is granted, the council will have a number of different legal powers to collect your Council Tax. Each of these powers is set out below.
After court, a request for information may be issued to you. You will have 14 days to pay the full amount including costs or complete and return the financial information form. You must provide your employment and income details. This will help us look at your financial circumstances and decide how the council will collect your outstanding Council Tax.
Failure to complete the form or to make contact may result in the council commencing criminal proceedings against you for the failure to supply the requested information. This is known as non-compliance action. Alternatively the council can choose to take any of the following forms of recovery action without further notice.
If you do not respond to our request for information within 14 days the council may inform you of our intention to commence criminal proceedings against you. You will be sent a summons and if found guilty you will be liable to a fine of up to £500 and £150 administration costs. If you provide false information, you can be prosecuted and fined up to £1000. You will also have a criminal record against your name.
Attachment of Income Support, Jobseekers Allowance, Employment and Support Allowance or Universal Credit
The council will ask the Department for Work and Pensions to make deductions from your benefit to pay off your debt.
If you are in work, the council will ask your employer to deduct an amount from your wages to pay off your debt.
Find out more about the regulations governing an attachment of earnings issued by the council to recover outstanding Council Tax.
If you are a councillor and receive an allowance, the council will deduct an amount of money from your allowance to pay off your debt.
If your debt is passed to an Enforcement Agent, they will send you a Notice of Enforcement and costs of £75.00 will be added to each of your debts. Multiple Liability Orders can be referred to an Enforcement Agent at any one time.
If you do not pay your debt plus the additional costs in full, or you do not contact the Enforcement Section to agree a payment arrangement, an Enforcement Agent will visit your property and at least £235.00 additional costs will be incurred.
If the Enforcement Agent visits your property, they will request your debt is paid in full or you will need to enter into a Controlled Goods Agreement. If no payment agreement is made, the Enforcement Agent can remove your goods for sale or storage.
If you enter into a Controlled Goods Agreement with the Enforcement Agent then fail to make your payments as agreed, the Enforcement Agent will return to your property and remove your goods for sale or storage.
If your total debt is more than £5000, the council can begin proceedings to make you bankrupt.
The council will send you a Statutory Demand requesting you pay your debt in full within 21 days. If you do not pay your debt in full, a bankruptcy petition will be submitted to the court. If the petition is granted:
- Your home could be sold to pay your debt
- Your bank accounts may be frozen
- The Official Receiver will investigate your affairs
- Your ability to get credit will be affected
- The Official Receiver may take control of your spending
If any one debt is more than £1,000 and you own your home, the council can apply to the County Court to place a legal charge on your home.
The initial application is made to the County Court without notice to you. The court will consider the application. If the court is satisfied with the application they will make an interim charging order. The court will then fix a hearing date to consider making a final charging order.
If the court grants the final charging order, the order is registered against the title of your property which secures the debt on your home. If you sell your home the amount of the order is paid first before you receive any of the proceeds of the sale.
If you pay the amount you owe under the charging order plus the additional costs, the order will then be discharged.
If you do not pay your debt, the council can apply to the court for an Order for Sale to force you to sell your home.
If you do not pay your debt, and the council feels that there is no alternative option left to collect your debt, the council can send you a summons requiring you to attend a 'committal hearing' in the Magistrates' Court.
If you receive a committal summons you should contact us immediately and seek legal advice before your hearing.
At the hearing the Magistrate will look at your income and expenses plus your employment details for each period for which you have been summonsed.
If the Magistrate believes you should have paid the money, the Magistrate may order you to pay a regular set amount to clear your debt or, order an attachment of your earnings or your benefits.
If the Magistrate feels it is appropriate they will issue a warrant of committal and put you in prison for up to 90 days.
If you receive a committal summons and do not appear in court, the Magistrate will issue a warrant for your arrest. This means a court Bailiff will come and arrest you and take you to court.
Remember, paying by Direct Debit ensures all your payments are made on time
Help and Advice
If you are having problems paying your Council Tax or struggling with debt, you can access free confidential and independent advice from a number of advice providers in Sunderland.