Citizens Advice is being inundated with people seeking help with debt caused by mounting council tax arrears. This area of debt has rapidly become the number one reason for people contacting Citizens Advice for financial issues.
While past years have seen council tax frozen, the previous year’s price hike in council tax has forced many people into debt and concerns are quickly rising. This coincides with an increase in people seeking council tax debt advice from Citizens Advice and more people seeking help from major debt charity StepChange.
In 2013 the government introduced welfare reforms that included abolishing council tax benefit and replacing it with a council tax reduction. This reduction is available to some people who claim benefits or are on low income. The amount by which a claimant’s council tax is reduced varies widely depending on their circumstances.
Other new welfare changes include the universal credit. This means people are now receiving benefits monthly, rather than the previous fortnightly, which makes a big difference as to how they need to budget.
It is believed people in arrears with council tax are struggling for several reasons. These include stagnating incomes, rising living costs, changing work patterns and the changes in welfare benefits. The combination of these factors is causing more and more people to seek debt advice.
Expert debt advice
Citizens Advice and other debt advice experts such as https://www.carringtondean.com/individual-voluntary-arrangement-iva/ offer professional support and advice to people seeking a solution to their council tax debts. Specialist debt advisers help with budgeting, energy bill payments, bailiffs and other financial issues.
An IVA (individual voluntary arrangement) may be recommended, which enters you into a legal agreement with your creditors and restructures your debt into manageable and affordable repayments. After approximately five years, the term is completed and the debt will have been repaid or possibly written off.
Experts in debt solutions are financially literate – something not everyone can claim – and are in a position to help people to manage their money and budget responsibly. They can also determine which debts are a priority and which are not. By looking at an individual’s entire debt package, a professional debt solution business can advise on the best ways to manage the debts in an affordable and achievable manner.