Personal tax debts can occur for numerous different reasons. In many cases, we deal with sole traders who haven’t budgeted effectively for their self-assessment tax returns, or people who have accepted a cash windfall but haven’t prepared for the tax due. In recent times, we’ve helped hundreds of contractors and individuals made redundant from the oil and gas sector across Aberdeenshire and surrounding areas.

What options are available when facing personal tax debts?

If you’re struggling with HMRC arrears of a personal nature and do not have the means to pay, you can attempt to reach an informal agreement with HMRC to allow you more ‘Time To Pay’. By discussing your situation with them, they may be more amiable when it comes to providing a more comfortable repayment structure. If you put your head in the sand and avoid their letters and phone calls, there’s a good chance of them refusing any requests.

If your personal debts are of a substantial nature, a formal insolvency procedure may be the best option to take. There are three main types of formal debt management processes in Scotland; these are:

Debt Arrangement Scheme

A Debt Arrangement Scheme is a debt management tool designed to help people repay their debts over an agreed amount of time without the threat of legal action. Creditors cannot block the scheme if it is fair and reasonable.

Contact Us On WhatsApp

Confidentially chat to one of our debt advisers instantly.

Chat Now

Trust Deed

A Trust Deed is a legally binding voluntary agreement which allows your Trustee to take over responsibility for dealing with your creditors. In this instance, you would stop paying HMRC and, instead, you pay your Trustee whatever surplus income you have left over a fixed term – usually 48 months – until the debt is repaid or the term is over, whichever happens first.

Sequestration

Sequestration is a form of insolvency that results in a person’s assets being transferred into the control of an appointed Trustee so that they can be used to satisfy creditors to the greatest extent possible. The term Sequestration itself means much the same as bankruptcy in other parts of the UK.

For personal debt issues that you feel are spiralling out of control, your best course of action is to contact us as soon as possible and a regulated Scottish money advisor can talk with you completely free of charge at your convenience. We have five offices across Scotland; these are in Aberdeen, Dundee, Edinburgh, Glasgow and Inverness.

What are your options if you have council tax arrears?

No matter how far things have progressed, there are steps you can take to resolve your council tax debt problems. The key is to act as early as possible as the more time you have, the more options are available. Possible solutions for council tax debt include:

Negotiating a repayment plan with the council - If you're still in the early stages and a summary warrant has not yet been issued, you should contact your council's finance department directly. Many councils will agree to an affordable repayment plan if you explain your situation honestly. If your debt has already been passed to sheriff officers, however, your council will not be able to help you and you must negotiate with the sheriff officers instead
Applying for a time to pay order - If you've received a charge for payment, you can apply to the sheriff court for a time to pay order. This allows you to repay the debt in affordable instalments and, if granted, stops the sheriff officers from taking enforcement action while it's in place.

What happens if I have other debts as well as council tax arrears?

While negotiating for additional time to pay can be the best route forward if council tax arrears are your only outstanding debt, for those who owe money on credit cards, loans, and other finance agreements, this may not be enough.

There are a range of formal debt solutions available in Scotland to help individuals deal with unmanageable debt, including council tax. These are:

Debt Arrangement Scheme (DAS) - A Debt Arrangement Scheme is a formal debt solution that allows you to repay what you owe through affordable monthly instalments over a longer period of time. Once an application for a DAS is made, it stops all ongoing enforcement action, including wage arrestment. Council tax arrears can be included in a DAS alongside your other debts, and you won't pay any interest or charges on the amounts included.
Trust Deed - A Trust Deed is a formal debt solution for people in Scotland who owe at least £5,000 in unsecured debt that they cannot afford to repay. As part of a Trust Deed, you make affordable monthly payments for a period of four years, with any remaining debt included in the arrangement being written off at the end of the term. Council tax arrears can be included in a Trust Deed alongside other unsecured debts. A Trust Deed also stops creditors from taking enforcement action against you, providing protection from wage arrestment, bank arrestment, and other forms of diligence.

For more on how a Trust Deed can help with council tax debt specifically, see our dedicated article: How to clear your council tax arrears with a Trust Deed.

Sequestration - Sequestration is Scotland's form of bankruptcy. It may be appropriate if you have no realistic way of repaying your debts. Council tax arrears are included in sequestration, and enforcement action stops once the process begins. Sequestration is a serious step with long-term implications, so it's important to take professional advice before going down this route. Your Scotland Debt Solutions advisor can explain how sequestration will affect you and whether it is likely to be appropriate for your situation.

Our 3 Step Process

Complete our easy to use Debt Calculator

Your advisor will discuss your options and recommend right course of action

Choose the option which is right for you based on your personal circumstances

Get Started Today - Debt Calculator

We help people across Scotland with council tax arrears

Every council in Scotland has the power to take enforcement action against those with council tax arrears, but each council approaches things in its own way. Whether you owe money to Glasgow City Council, City of Edinburgh Council, Aberdeen City Council, Dundee City Council, Highland Council, Fife Council, or any other local authority, our team can help.

We have offices in Aberdeen, Dundee, Edinburgh, Glasgow, and Inverness, but if you'd prefer to talk things through over the phone or via WhatsApp, we can do that too.

If you're worried about council tax debt, the most important thing you can do is talk to someone. Our advisors are here to listen, explain your options, and help you find the right way forward, whether that's negotiating with your council, entering into a formal debt solution, or simply understanding where you stand.

Everything we discuss is completely confidential, and your initial consultation is completely free of charge.

Call our team on 0141 292 6587 or request a free debt report to get a clear picture of your financial situation and better understand your options.