Debts come in many shapes and sizes. Most of the debts I recover are owed to private businesses or landlords, but money can also be owed to public bodies, including council tax due to local authorities. But are these debts a special case?
The Dilemma of Council Tax Debts
Councillors in Wolverhampton recently launched a drive to recover thousands of pounds owed in unpaid council taxes, and are looking at possible strategies. They aren’t alone, but they express the problems very clearly.
While none of us like paying council tax, it’s necessary — without it, our bins wouldn’t be emptied and our streets wouldn’t be lit. Though the councillors emphasised that council tax is “not a voluntary option”, they’re reluctant to use a heavy hand, putting people genuinely in difficulties into an impossible situation.
As Recovery Manager Tracey Richards puts it, “This is about tracking down the people who are able to pay but haven’t, while at the same time providing debt support to those who are struggling.”
Finding a Balance
The Wolverhampton councillors are trying to find a balance. On the one hand, they have a duty to raise the money needed to supply services to the people of the area, but they also have a duty not to hound people who genuinely can’t afford to pay.
Their approach is to distinguish the “can’t pays” from the “won’t pays”, so the latter can be pursued through the appropriate channels, while the former can be helped to reduce their debt and eventually pay it off. This includes offering debt advice and setting payments based on the household’s income.
Council Tax and Private Debt
On the face of it, private creditors are in a different position from a local authority. If you’re owed money by a defaulting customer or tenant, you don’t have the same duty as the local authority to help them.
All the same, there are parallels, in particular the distinction between “can’t pays” and “won’t pays”. While a “won’t pay” can be pursued through the courts (or the threat of court action), the chances are that you won’t get your money by treating a “can’t pay” in the same way.
The ideal solution for everyone is if the debtor can be enabled to clear their debt in an organised way. This will give you the best chance of eventually receiving the money owed to you.
If you’re in this position, you’re very welcome to give me a call for a chat about options for approaching recovery of your money.
STOP PRESS: I was just about to post this when a new article caught my eye. From 2021, the government is planning on introducing 60-day “breathing space” periods for certain problem debtors, including those owing money to local authorities. Watch this space for more information.