Does Bankruptcy Clear Council Tax Debt?

Yes. Council tax arrears owed when you go bankrupt are included and written off when you’re discharged. New council tax after the bankruptcy date must still be paid.

Last updated: November 2026

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The formal debt solutions mentioned here (IVAs, DROs and bankruptcy) follow the rules for England and Wales. If you live in Scotland, different solutions apply.

Council tax arrears are one of the most common debts in bankruptcy. Unlike some debts, such as court fines and student loans, they’re fully covered.

The short answer

Council tax arrears are included in bankruptcy.
The council can’t enforce them once you’re bankrupt, including bailiffs.
Remaining arrears are written off on discharge, usually after 12 months.
Council tax for the period after your bankruptcy order must still be paid.
A DRO or IVA can also deal with council tax arrears.

What happens to council tax arrears in bankruptcy?

The council becomes a creditor in your bankruptcy. It must stop enforcement, including bailiff action and attachment of earnings, for the arrears. On discharge, the arrears are written off.

What about the current year's council tax?

Council tax is charged daily. Anything that relates to the period before your bankruptcy order is included. Anything after must be paid as normal. Ask the council to split your account at the bankruptcy date.

What if bailiffs have already taken control of goods?

If bailiffs have already taken control of goods before the bankruptcy, they may be able to continue. Get advice quickly if bailiffs are involved.

What are the alternatives?

A DRO if your debts are under £50,000 and your income and assets are low.
An IVA if you have regular spare income and want to avoid bankruptcy.
Section 13A relief from the council in cases of severe hardship.

Common questions

Can I go bankrupt just for council tax?

Yes, if you can’t pay your debts. But for council tax alone, a payment plan, Section 13A relief or a DRO may be more suitable.

Can the council make me bankrupt for council tax?

Yes. Councils can petition for bankruptcy for debts of £5,000 or more, though it’s uncommon.

Does bankruptcy stop council tax bailiffs?

For arrears included in the bankruptcy, enforcement must generally stop.

Getting help

You don’t have to deal with debt on your own. Free, impartial advice is available from MoneyHelper, StepChange and National Debtline. If you want to talk through whether a formal solution such as an IVA could be suitable, you can also get in touch with us.