If the Council Tax debt that you owe is subject to a Liability Order then the Council may apply to the County Court for a Charging Order to be placed on your property.
Should this action be necessary the Council will instruct it's appointed solicitors to make application in the County Court. You will incur additional costs and court fees at that point. Should the Charging Order be granted you will also subject to ongoing interest at the statutory rate (currently 8%).
Details of the Council's charge will appear on HM Land Registry.
Once a Charging Order is granted the Council may go back to Court and take Order for Sale proceedings to force the sale of your property at a price set by the Court. Once the property is sold the Council will recover the debt and all of it's costs & interest from the proceeds.
A bankruptcy order could be made against a person who fails to pay their debts. A petition by a creditor is usually presented at the County Court and once an order is made an official receiver would be given responsibility for administering the bankruptcy.
Being made bankrupt is serious and could have a number of effects on you that include:
- Your assets will no longer be controlled by you
- The Official Receiver may have to sell your home to go towards paying the bankruptcy debts
- When a bankruptcy order is made you should stop using your cheque book and bank cards and hand them over to the Official Receiver
- Your pension may be claimed in the bankruptcy whether you are currently receiving it or it is due in the future
- If you are self employed your business would almost certainly be closed down and any employees dismissed
A bankruptcy order can still be made even if you refuse to acknowledge the proceedings or refuse to agree to them.
Bankruptcy deals with debts at the date on which the order is made. If new debts are incurred after that date it could result in a further bankruptcy order.