A new study of debt has revealed that millions of people have failed to pay their essential bills. Council tax debts are the most alarming, with over 6 million people owing more than £300. Some 17% of people owe more than £100 to gas and electricity companies, and 10% owe more than £300 to their water company. Over 9 million people have owed money on at least one utility bill for more than a year.
Overall, when asked which was the hardest bill to cover each month, three quarters of people said it was the council tax bill. Electricity bills came next – posing difficulties for a quarter of respondents. CEO of icount, Samuel Mond said: “The sheer amount of people in the UK struggling to pay essential utility bills is worrying. These payments contribute to basic day-to-day quality of life such as light and warmth. ”
If you fail to pay, the most obvious impact will be that after some time, and repeated attempts to get the money, they will cut you off from the supply.
Your debt will also appeal on your credit record, and if you don’t pay in time, your debt will be passed to a debt recovery firm, which will send in the bailiffs. If they cannot seize goods to pay your bills, they may get a county court judgment demanding payment – which again will cause issues for your credit record.
Given the consequences of missing utility bills, it’s easy to see why people may prioritise these debts over council tax. As Mond says: “Council Tax payments may be considered a lower priority for those people struggling to pay utility bills. The direct impact may be perceived to be less, than if the electric, gas or water is cut off by the supplier.”
However, failing to pay your council tax has even more serious consequences. Paying late will create a mark on your credit record, but if it continues over the long term, the problems will start to mount. You will get two reminder letters, and then a third – which will demand you pay for the whole year’s council tax. If you don’t pay, they will go to court, and their legal costs will be added to your bill. They can then take money directly from your wages or benefits.
If they can’t recover the costs, they will send the bailiffs round, and if they can’t recover the property, they will take you to court. You can be sent to prison for up to three months if the court decides you don’t have a good reason for failure to pay. They will also arrange a schedule for you to repay everything you owe.
If you cannot pay your bills, the best bet is always to get in touch with the people you owe money to, and explain you are having issues, before they start sending demands. It’s in their best interests that this money is eventually paid, so they will usually come to an agreement which allows you to pay over a longer period of time. If this feels overwhelming, organisations like the Citizens Advice Bureau can help, and charities like StepChange will be able to talk to the suppliers on your behalf.