THOUSANDS FACE RUIN OVER COUNCIL TAX

First published by: This is Money

Thousands of people are being tipped into bankruptcy when town halls chase them to pay their Council Tax, a report said yesterday.

Dumped on: Council's are turning to bailiffs too quickly

Dumped on: Council's are turning to bailiffs too quickly

Citizens' Advice said two and a half million people were summonsed after failing to pay their tax bill last year. Bailiffs were used in 1.2m cases and councils asked for bankruptcy orders in 5,000. The report says pensioners and poor families have had to sell their homes to meet the legal costs of fighting bankruptcy orders. It accuses local authorities of using increasingly aggressive methods and forcing families to run up five-figure legal bills in Council Tax disputes.

The charges by Citizens' Advice follow years of growing controversy over local government attempts to collect the Council Tax, which went up by around double the rate of inflation last year and is likely to increase by much more than inflation again this year. Around 3% of all Council Tax bills went unpaid last year, costing town halls some £60m and adding just under £35 to the average bill of families who did not default.

Citizens' Advice said 5,000 households were threatened with bankruptcy petitions and in a thousand of these cases town halls were allowed to seize assets. Liberal Democrats said councils should not be trying to push people into bankruptcy in the current economic crisis. Local government spokesman Julia Goldsworthy said: 'Public bodies should do everything they can to ensure bankruptcy is avoided.'

But the Department for Communities and Local Government said: 'Local authorities must have the tools at their disposal to tackle the small minority of people who can but won't pay.' Sir Jeremy Beecham, vice-chairman of the Local Government Association, said: 'People are given as much leeway as possible.' But Peter Tutton, debt policy adviser for Citizens' Advice, said bankruptcy orders were used too often against vulnerable people with relatively small debts.

He said: 'Even more people on low incomes are struggling to pay their tax. The best councils are doing all they can to help people in difficulty, but too many still send in bailiffs indiscriminately.'

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