If you're struggling with council tax arrears alongside other debts, a formal or informal debt solution can bring everything together into one affordable arrangement — and in many cases, write off the debt you can't afford to repay. Because council tax is a priority debt with serious enforcement consequences, choosing the right solution matters. Below we explain the four main options available in England and Wales.
Individual Voluntary Arrangement (IVA)
An IVA is a legally binding agreement between you and your creditors, set up and supervised by a licensed insolvency practitioner. You make one affordable monthly payment, typically for five to six years, and when the arrangement completes, any remaining qualifying debt — including council tax arrears — is legally written off.
- Best suited to: unsecured debts over £7,000, two or more creditors, and at least around £100 a month spare after essential living costs.
- Council tax: arrears up to the date the IVA starts can be included. Once approved, the council must stop enforcement action for included debt, and bailiff contact for those arrears stops.
- Things to consider: an IVA appears on your credit file for six years, fees apply (typically £3,650 in total, taken from your monthly payments once approved), and homeowners may need to deal with equity in their property in the final year.
Read our full guide: Can an IVA include council tax debt?
Debt Management Plan (DMP)
A DMP is an informal arrangement where a provider negotiates reduced payments with your creditors and distributes one monthly payment between them. It's flexible — you can adjust or cancel it — but it isn't legally binding, so creditors aren't obliged to freeze interest or stop enforcement.
- Best suited to: debts over £2,000 where you can repay in full given time, but need lower payments for now.
- Council tax: a DMP can include council tax arrears, but because councils have strong collection powers, they often still expect arrears to be cleared within the current year. A DMP alone won't always stop bailiff action for council tax.
Debt Relief Order (DRO)
A DRO is a low-cost formal insolvency option for people with lower levels of debt, little spare income and few assets. If your circumstances don't improve during the 12-month DRO period, the debts included — including council tax arrears — are written off.
- Best suited to: total debts under £50,000, disposable income under £75 a month, assets under £2,000 and no home ownership.
- Council tax: arrears are a qualifying debt and are included. Enforcement for included debts must stop during the DRO.
Read our full guide: Does a DRO cover council tax?
Bankruptcy
Bankruptcy is a formal insolvency process that writes off unaffordable debts, usually within 12 months. It's a powerful fresh start, but it has serious implications for your assets, home and some jobs — which is why it's generally treated as a last resort.
- Best suited to: larger debts with no realistic prospect of repayment, where other solutions aren't available.
- Council tax: arrears are included and written off on discharge.
Comparing your options at a glance
| Solution | Typical debt level | Duration | Council tax written off? | Stops enforcement? |
|---|---|---|---|---|
| IVA | £7,000+ | 5–6 years | Yes, on completion | Yes, for included debts |
| DMP | £2,000+ | Until repaid | No — repaid in full | Not guaranteed |
| DRO | Under £50,000 | 12 months | Yes, on completion | Yes, for included debts |
| Bankruptcy | Any (usually larger) | ~12 months | Yes, on discharge | Yes |
Breathing Space: emergency protection
If you need immediate protection while you decide on a solution, the government's Breathing Space scheme (Debt Respite Scheme) can pause most enforcement action, interest and charges for up to 60 days while you get debt advice. Council tax arrears qualify, and bailiff visits for included debts must stop during the period.
Which solution is right for you?
The honest answer: it depends on your debt level, income, assets and what you want to achieve. That's exactly what our advisors help you work out — in one confidential, judgement-free conversation. Check if you qualify or call 0161 820 1298.