A debt management plan is designed for non-priority debts such as credit cards and loans. Council tax has strong enforcement powers, so it’s treated differently.
The short answer
- Council tax is a priority debt.
- Most DMP providers leave council tax out and budget for it separately.
- You pay the council directly: current year plus arrears.
- The DMP then shares what’s left among non-priority creditors.
- An IVA or DRO can include council tax arrears.
Why isn't council tax usually in a DMP?
A DMP is informal. Creditors aren’t bound by it, and the council has powers to use bailiffs, take money from wages or benefits, and in England apply for committal. Paying it directly keeps it at the top of the list.
How does it work in practice?
Your budget includes an amount for the council, covering the current year and something towards arrears. The rest of your spare income goes into the DMP. See priority and non-priority debts.
Which solutions can include council tax arrears?
An IVA, a DRO and bankruptcy can all include council tax arrears, because they’re legally binding.
Common questions
Can you add council tax to a debt management plan?
It’s unusual. Most providers deal with council tax separately because it’s a priority debt.
Can council tax arrears go in an IVA?
Yes. Council tax arrears are commonly included in IVAs. See does an IVA cover council tax?
Will a DMP stop council tax bailiffs?
No. A DMP isn’t legally binding, so it won’t stop council enforcement.
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.