Council tax rebels face risk of bankruptcy

A crackdown by local authorities on council tax defaulters has led to more than a five-fold increase in the number of people threatened with bankruptcy, according to a report in The Times.

Although councils have had powers to take bankruptcy proceedings against persistent non-payers of council tax for more than a decade, they are using the method increasingly to force people to pay up. The decision to employ what has usually been viewed as a last resort has affected all types of debtor, from council tax rebels who object to price rises on principle to pensioners who cannot afford payments.

In 2000-01, councils in England and Wales initiated just over a thousand insolvencies. By 2004-05 the figure had risen to almost 6,000, according to the Chartered Institute of Public Finance and Accountancy.

Citizens Advice Bureaux are reporting more cases of clients who have had bankruptcy proceedings issued against them by their local council to recover unpaid council tax. A spokesman for Citizens Advice said: "Local authorities have to recover unpaid council tax, but some are not doing all they can to check people's ability to pay before taking drastic action."

A survey by the GMB Union showed that local authorities failed to collect £738 million in council tax during the last financial year.

Households are contacted six times before bankruptcy proceedings take place. An initial bill is sent out before a reminder notice, which is followed by a court summons. After the court case, a liability order is posted and a final notice is delivered within 14 days. Only then does the council send round the bailiffs or issue a bankruptcy proceedings notice.

Council tax has risen by more than 130 per cent since 1994, up to an average of £1,056 per year, today.

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