Updated for 2026

If you owe money and a creditor is threatening bankruptcy, the minimum amount they need to pursue this action against you matters enormously. The bankruptcy threshold in England and Wales currently sits at £5,000, a figure that was raised from the previous £750 limit. This change has had a significant impact on how debt enforcement works in the UK, and understanding where things stand right now could make all the difference to your financial future.

What Is the Bankruptcy Threshold?

The bankruptcy threshold is the minimum amount of debt a creditor must be owed before they can petition the court to make you bankrupt. In England and Wales, this figure currently stands at £5,000. This means that if you owe less than £5,000 to a single creditor, they cannot force you into bankruptcy proceedings.

This threshold was increased from £750 to £5,000 in October 2015 under the Debtors Act reforms. The previous £750 figure had been in place since the mid-1980s and was widely criticised as being completely out of touch with modern debt levels. At the time of the change, the Insolvency Service calculated that if the original threshold had kept pace with inflation, it would have stood at roughly £1,700, so the jump to £5,000 was a deliberate move to offer greater protection to people with relatively modest debts.

For council tax debt specifically, this threshold is crucial. Local authorities sometimes use bankruptcy as a tool to recover unpaid council tax, and the higher threshold means they can only take this step when arrears have reached a substantial level.

Why the Threshold Was Raised

The decision to raise the minimum bankruptcy threshold came after years of consultation and mounting evidence that the old £750 limit was causing real harm. The Insolvency Service gathered data showing that hundreds of people were being made bankrupt each year over debts that, while stressful, were not large enough to justify such a severe outcome.

Bankruptcy has life-changing consequences. It can affect your ability to get credit for years, prevent you from holding certain professional positions, and in some cases lead to the forced sale of your home. For someone owing less than a thousand pounds, these consequences were grossly disproportionate to the debt itself.

The consultation process found strong support for raising the threshold. Business groups, debt charities, and the Government all agreed that alternative debt solutions, such as debt relief orders (DROs) and individual voluntary arrangements (IVAs), were far more appropriate for lower-level debts. By raising the threshold to £5,000, the Government effectively steered creditors towards these less destructive options for smaller debts.

Debt Relief Orders: The Alternative for Lower Debts

If your total debts are below the bankruptcy threshold, or if your income and assets are very low, a debt relief order might be the right option for you. DROs were introduced in 2009 specifically to help people who could not afford bankruptcy fees and did not have enough assets to make repayment realistic.

To qualify for a DRO in 2026, you need to meet several criteria. Your total qualifying debts must not exceed £50,000 (this limit was raised from £30,000 in June 2024). Your disposable income after essential expenses must be no more than £75 per month, and your total assets must not exceed £2,000 (with a vehicle worth up to £4,000 excluded from this calculation).

A DRO lasts for 12 months. During that period, your creditors cannot take any enforcement action against you for the debts included in the order. Once the 12 months are up, those debts are written off entirely. The application fee is £90, which is significantly less than the cost of a bankruptcy petition.

For people on very low incomes who are struggling with council tax debt or other household arrears, a DRO can provide genuine breathing space. It pauses enforcement, stops the letters and phone calls, and gives you a clear path to becoming debt-free.

What Happens If You Are Made Bankrupt

If your debts exceed £5,000 and a creditor (or you yourself) petitions for bankruptcy, the process is handled through the courts. A bankruptcy order typically lasts for 12 months, after which you are discharged and most of your debts are written off. However, during that period and beyond, the consequences are serious.

Your assets may be sold to repay creditors. This can include your home, savings, investments, and valuable possessions. If you own a property, the trustee appointed to manage your bankruptcy may seek a court order for its sale, although they must consider the needs of your family and any dependants.

Your credit rating will be severely affected for at least six years. You will find it extremely difficult to obtain any form of credit during this time, and many lenders will refuse your applications outright. Certain professions, including accountancy, law, and financial services, may restrict or prohibit you from working while bankrupt.

Your bankruptcy will also appear on the Individual Insolvency Register, which is publicly searchable. This can affect your reputation and, in some cases, your ability to rent property or secure employment.

The threat of bailiff enforcement is often what pushes people towards bankruptcy in the first place. If you are receiving visits from enforcement agents over council tax or other debts, it is vital to seek advice before the situation escalates further.

Council Tax and Bankruptcy: What You Need to Know

Council tax debt is treated as a priority debt in the UK. Unlike credit card balances or personal loans, councils have strong enforcement powers and can escalate collection quickly. The typical process involves reminder notices, a court summons, a liability order, and then enforcement action, which can include bailiff visits, attachment of earnings, or in extreme cases, committal proceedings or bankruptcy.

Councils can and do petition for bankruptcy when arrears exceed £5,000. While this is relatively rare compared to other enforcement methods, it does happen, particularly when a council has exhausted other options or when a debtor has ignored all previous attempts at communication.

If your council tax arrears are approaching or have exceeded the £5,000 threshold, you should treat the situation as urgent. Contact your council to discuss a manageable repayment plan before they take further action. Most councils would rather agree to a payment arrangement than go through the expense and effort of bankruptcy proceedings.

It is also worth checking whether you qualify for council tax support, a discount, or an exemption. Many people pay more than they should because they are unaware of the reliefs available to them. Single person discount, student exemptions, disabled band reduction, and council tax reduction schemes can all bring your bill down significantly.

Alternatives to Bankruptcy in 2026

Bankruptcy should always be treated as a last resort. There are several alternatives that may be more appropriate depending on your circumstances.

An individual voluntary arrangement (IVA) allows you to make affordable monthly payments to your creditors over a fixed period, usually five or six years. At the end of the arrangement, any remaining debt is written off. An IVA is a legally binding agreement that protects you from further enforcement action while it is in place, and it is often a better option than bankruptcy if you have a regular income.

A debt management plan (DMP) is an informal agreement with your creditors to repay what you owe at a reduced rate. While not legally binding, most creditors will cooperate with a DMP if it is set up through a reputable debt advice provider. The advantage of a DMP is that it is flexible and can be adjusted if your circumstances change.

For debts under £50,000 with very low income, the debt relief order route described above is often the most practical solution. And for council tax arrears specifically, negotiating directly with your council for a repayment schedule can prevent the situation from reaching the point where bankruptcy becomes a possibility.

The Citizens Advice Bureau and StepChange Debt Charity both offer free, confidential debt advice and can help you work out which option is best for your situation.

How to Protect Yourself from Creditor Action

The single most important thing you can do if you are in debt is to communicate. Ignoring letters, court summonses, and phone calls will only make the situation worse. Creditors, including councils, are far more likely to work with you if you engage with them early.

Open every piece of post that arrives, even if you are dreading what is inside. Keep a record of all correspondence and note any deadlines. If you receive a statutory demand (the formal notice that a creditor intends to petition for your bankruptcy), you have 21 days to either pay the debt, come to an arrangement, or apply to the court to have the demand set aside.

Do not assume that because you owe less than £5,000 to one creditor, you are safe from all enforcement. Creditors can still pursue county court judgments, send bailiffs, or apply for attachment of earnings orders for debts below the bankruptcy threshold. The £5,000 limit only applies to bankruptcy petitions specifically.

If you are dealing with multiple debts from different creditors, the combined stress can feel overwhelming. Speaking to a qualified debt adviser can help you see the full picture and prioritise which debts to tackle first. Council tax and rent arrears should always be treated as priorities because the consequences of non-payment are more severe than for most other types of debt.

Get Free Advice from Council Tax Advisors

If you are worried about bankruptcy, struggling with council tax arrears, or unsure which debt solution is right for you, Council Tax Advisors can help. Our team provides free, confidential guidance on all aspects of council tax debt, enforcement action, and insolvency options. We will help you understand your rights, explore every available option, and take practical steps to get your finances back under control.

You do not have to face this alone. Whether you need help negotiating with your council, understanding a statutory demand, or working out whether a DRO or IVA is the right path for you, we are here to support you every step of the way.

Contact Us for Free Advice

Council Tax Advisors provides general guidance on council tax and debt-related matters. We are not regulated by the Financial Conduct Authority (FCA) and do not provide regulated financial advice or debt counselling services. If you require regulated debt advice, we recommend contacting a licensed insolvency practitioner, Citizens Advice, or StepChange.

Updated for 2026

Council Tax Debt and Depression: Breaking the Cycle in 2026

Debt and mental health are closely linked, and council tax arrears can be one of the most stressful forms of debt you face. Here is what you need to know, and how to start getting help.

The Connection Between Council Tax Debt and Mental Health

If you are struggling with council tax arrears, you are not alone. According to recent figures, millions of UK households fall behind on their council tax payments each year. What often gets overlooked is how deeply this type of debt can affect your mental wellbeing.

Council tax debt is different from other debts. You cannot walk away from it. Your local authority has powerful enforcement tools at its disposal, from court summons to bailiff visits. That constant pressure, combined with the fear of what comes next, can push people towards anxiety, depression, and a sense of hopelessness that makes everything harder to manage.

The relationship works both ways. Depression can make it almost impossible to deal with everyday tasks like opening post, answering the phone, or keeping on top of bills. When your mental health is suffering, financial management often slips, and council tax arrears can build up quickly without you even realising the full extent of what you owe.

How Debt Affects Your Mental Health

Research consistently shows that people in debt are more likely to experience mental health problems. A study by the Royal College of Psychiatrists found that one in two adults with a debt problem also has a mental health condition. Council tax debt carries its own particular weight because of the enforcement process behind it.

When your council sends a reminder letter, your stress levels rise. When a court summons arrives, that stress can become overwhelming. If enforcement agents are instructed, the anxiety of a potential visit to your home can dominate your every waking thought.

Common signs that debt is affecting your mental health include:

• Difficulty sleeping or sleeping too much
• Avoiding opening letters or answering the door
• Feeling constantly on edge or irritable
• Withdrawing from friends and family
• Losing interest in things you used to enjoy
• Struggling to concentrate at work

If any of these feel familiar, it is important to recognise that your reaction is completely normal. Debt creates real psychological pressure, and your mind is responding to a genuine threat to your security and stability.

How Depression Makes Debt Worse

Depression does not just sit alongside debt: it actively makes it harder to resolve. When you are experiencing low mood, fatigue, or a lack of motivation, the idea of phoning your council to arrange a payment plan can feel like climbing a mountain.

People with depression often describe a paralysis around their finances. Unopened letters pile up. Direct debits get cancelled because the account is empty. The debt grows, and with it, the shame and guilt that feeds the depression further.

This cycle is well documented. Mind, the mental health charity, describes it as a “debt-mental health cycle” where each problem reinforces the other. Breaking that cycle requires addressing both issues, not just one.

Your council has a duty to consider your circumstances. Under the NHS mental health framework and local authority guidelines, councils should take your mental health into account when pursuing debt recovery. If you or someone you know is struggling, this is not something you should try to handle alone.

Practical Steps You Can Take Today

Getting out of the debt-depression cycle starts with small, manageable actions. You do not need to fix everything at once. Here is where to begin:

1. Speak to someone you trust

Whether that is a friend, family member, or your GP, telling someone what you are going through makes a real difference. Your doctor can provide support for your mental health and may write a letter to your council confirming your condition, which can influence how they handle your case.

2. Contact your council

Most councils have hardship teams or dedicated support for people struggling with payments. Explain your situation honestly. Many councils will pause enforcement action while you are getting help, particularly if you can demonstrate that mental health issues are a factor.

3. Get free debt advice

StepChange offers free, confidential debt advice and can help you work out a realistic plan to deal with your council tax arrears. They deal with councils on your behalf, which removes a huge amount of stress from the process.

4. Understand the enforcement process

Knowledge is power. Understanding the steps to take back control of council tax debt can reduce your anxiety significantly. When you know what the council can and cannot do, the fear of the unknown diminishes.

5. Look into financial support

You may be entitled to council tax reduction, a discount, or an exemption that you are not currently claiming. If your income is low, a debt relief order could provide a fresh start. Many people in financial difficulty are paying more council tax than they need to simply because they have not checked what help is available.

Your Rights When Mental Health Is a Factor

Councils are expected to follow guidelines that take vulnerability into account. If you are experiencing depression or another mental health condition, your council should:

• Consider pausing or slowing enforcement action
• Offer flexible payment arrangements
• Refer you to appropriate support services
• Avoid sending bailiffs where vulnerability has been disclosed
• Accept evidence from your GP or mental health professional

In practice, not every council handles this as well as it should. If you feel your mental health is being ignored during the debt recovery process, you have the right to complain. You can also contact your local councillor or MP for support.

There is genuinely no shame in asking for help with council tax debt. Thousands of people across the UK are in exactly the same position, and the support systems exist because this is a recognised and common problem.

Get Free Help With Council Tax Debt

If council tax debt is affecting your mental health, or if depression is making it harder to deal with your finances, Council Tax Advisors can help. We provide free, independent advice tailored to your situation. We will help you understand your options, deal with your council, and find a path forward that works for you.

You do not have to face this alone.

Get Free Advice

Council Tax Advisors provides free information and guidance on council tax matters. We are not a financial advisory service and do not provide regulated financial advice. If you are experiencing a mental health crisis, please contact your GP, call the Samaritans on 116 123, or visit your nearest A&E department.

Updated for 2026

Managing Debt Repayments: A Practical Guide for UK Households in 2026

If you are juggling multiple debts and struggling to keep up with repayments, you are not alone. Millions of UK households face the same challenge every month. This guide explains how to take control of your repayments, avoid common pitfalls, and find a way forward that works for your situation.

The Reality of Debt in UK Households

Household debt across the United Kingdom has reached levels that would have seemed unthinkable a generation ago. According to the Money Helper service, millions of people are now spending more than they earn each month, relying on credit cards, overdrafts, and loans to cover the shortfall.

The cost of living crisis that began in 2022 has left a lasting mark. Energy prices, food costs, and rent have all risen sharply, while wages have not kept pace. For many families, the amount left over after paying for essentials like housing, council tax, and utility bills is barely enough to cover basic needs, let alone make meaningful progress on outstanding debts.

Council tax arrears are a particularly common problem. Unlike most other debts, councils can take legal action relatively quickly if payments are missed, which means council tax should always be treated as a priority debt. If you are behind on your council tax, it is important to act sooner rather than later.

Know Exactly What You Owe

The first step towards managing your repayments is understanding the full picture. It sounds straightforward, but many people avoid looking at the numbers because the total feels overwhelming. Ignoring the problem only makes it worse.

Sit down and list every debt you have. Include credit cards, overdrafts, personal loans, store cards, council tax arrears, and any money owed to friends or family. For each one, write down the total amount owed, the minimum monthly payment, the interest rate, and the due date.

Once you have this written down, you will have a clear view of your financial situation. That clarity is genuinely powerful. It removes the anxiety of not knowing and gives you a foundation to build a proper repayment plan.

If you are unsure about exact figures, contact your creditors directly. They are required to provide you with up to date statements. You can also check your credit report for free through services like Experian, Equifax, or TransUnion, which will show most of your outstanding credit commitments.

Prioritise Your Debts the Right Way

Not all debts are equal. Priority debts are those where the consequences of non-payment are most serious. These include council tax, rent or mortgage payments, energy bills, and court fines. If you fall behind on any of these, you could face legal action, bailiff visits, or even the loss of your home.

Non-priority debts, such as credit cards, personal loans, catalogue debts, and overdrafts, still need attention, but the immediate consequences are less severe. Creditors can chase you for payment and it will affect your credit score, but they cannot send bailiffs or take your home without first going through the courts.

When money is tight, always make sure your priority debts are covered first. Then allocate whatever you can afford towards your non-priority debts. Even small, regular payments show creditors that you are making an effort, which can work in your favour if the situation ever reaches a formal review.

Create a Realistic Budget

A budget is not about restricting your life. It is about giving every pound a purpose so that you stay in control. Start by listing all of your income, including wages, benefits, tax credits, and any other regular payments you receive.

Next, list all of your essential outgoings: rent or mortgage, council tax, utilities, food, transport, insurance, and minimum debt repayments. Subtract these from your income. The figure you are left with is your disposable income, and this is the amount available for additional debt repayments, savings, or non-essential spending.

If your outgoings exceed your income, that is a clear sign you need to take action. Look at where you might reduce costs. Could you switch energy providers? Are there subscriptions you no longer use? Could you reduce your food bill by meal planning? Even small savings add up over the course of a year.

The Citizens Advice Bureau offers free budgeting tools and can help you work through your finances step by step if you are unsure where to start.

Avoid the Trap of Borrowing to Repay

One of the most common mistakes people make when struggling with debt is borrowing more money to cover existing repayments. It might seem like a quick fix, but it almost always makes the situation worse in the long run.

Payday loans are a prime example. They are marketed as a short term solution, but the interest rates are eye-watering. A small loan of a few hundred pounds can quickly spiral into a much larger debt if you are unable to repay it on time. The same applies to taking cash advances on credit cards, which often attract higher interest rates than regular purchases.

If you find yourself needing to borrow to make repayments, that is a strong signal that your current repayment plan is not sustainable. Rather than taking on more debt, speak to your creditors about reducing your monthly payments or consider seeking free debt advice from a qualified service.

Understand Your Credit Card Terms

Credit cards can be a useful financial tool when managed properly, but they can also become a serious burden if you only make the minimum payment each month. The minimum payment is designed to cover the interest and a tiny fraction of the balance, which means it could take decades to clear the debt in full.

Check the interest rate on each of your cards. If you have balances on multiple cards, consider whether a balance transfer to a lower rate card could save you money. Many providers offer 0% balance transfer deals, although there is usually a transfer fee of around 2% to 3% of the balance.

Be careful with cash withdrawals on credit cards. Most cards charge a higher interest rate for cash advances, and interest starts accruing immediately rather than at the end of the billing cycle. These hidden costs can catch people out and add significantly to the total amount owed.

If you are struggling to keep up with credit card repayments, contact your provider. Many lenders have hardship teams who can freeze interest, reduce payments, or set up a more manageable repayment plan. They would rather work with you than write off the debt entirely.

What to Do If You Are Falling Behind on Council Tax

Council tax is one of the most aggressively collected debts in the UK. If you miss a single payment, your council can cancel your right to pay in instalments and demand the full year’s amount in one go. From there, the process moves quickly: a court summons, a liability order, and then enforcement agents (bailiffs) turning up at your door.

If you are struggling to pay your council tax, contact your council immediately. Many councils are willing to set up special payment arrangements for people in genuine financial difficulty. You may also be entitled to council tax support or a reduction based on your income, which could lower your bill significantly.

Do not ignore letters from the council. Every letter you ignore makes the situation harder to resolve and brings you closer to enforcement action. Early intervention is always the best approach.

Free Debt Advice Services You Can Use Today

You do not need to pay for debt advice. There are several reputable, free services in the UK that can help you work through your options:

• StepChange Debt Charity: offers free, confidential debt advice and can set up debt management plans on your behalf
• Citizens Advice: provides guidance on budgeting, debt priorities, and your legal rights
• National Debtline (run by the Money Advice Trust): offers free phone and online advice
• Debt Relief Orders: if your debts are under £30,000 and you have little disposable income, a DRO could write off your debts after 12 months

These services exist because managing debt alone can feel impossible. There is no shame in asking for help, and the earlier you reach out, the more options you will have available to you.

Need Help Managing Your Debt Repayments?

Our experienced team at Council Tax Advisors can help you understand your options, negotiate with creditors, and put together a repayment plan that works for your circumstances. Do not wait until enforcement action starts: get in touch today for free, confidential advice.

Get Free Advice Today

Disclaimer: The information provided in this article is for general guidance only and does not constitute financial advice. Council Tax Advisors is not regulated by the Financial Conduct Authority. If you are experiencing serious financial difficulty, we recommend speaking to a qualified debt adviser through a free service such as StepChange, Citizens Advice, or National Debtline. Your individual circumstances may vary, and any action you take based on this information is at your own discretion.

Updated for 2026

What Is a Debt Relief Order?

If you are on a low income and struggling with debt, a Debt Relief Order (DRO) could be the fresh start you need. DROs were designed specifically for people who cannot afford to pay back what they owe, and in 2026 the rules have been updated to help even more people qualify.

A Debt Relief Order is a formal debt solution available in England and Wales. It is aimed at people who have relatively low levels of debt, very little disposable income, and few or no assets. Once approved, a DRO freezes your debts for 12 months. During that period, your creditors cannot chase you for payment or take any further action against you. If your circumstances have not improved by the end of those 12 months, your debts are written off entirely.

DROs were introduced in 2009 as a simpler, cheaper alternative to bankruptcy. They are administered by the Insolvency Service, and you apply through an approved intermediary, typically a debt adviser at a charity such as Citizens Advice or StepChange.

Who Qualifies for a DRO in 2026?

The eligibility rules for DROs were updated in June 2024, making them accessible to a wider group of people. To qualify, you need to meet all of the following conditions:

• Your total qualifying debts must not exceed £50,000 (increased from £30,000)
• Your disposable income after essential living costs must be £75 or less per month (increased from £50)
• Your total assets must not be worth more than £2,000 (increased from £1,000)
• Your vehicle must not be worth more than £4,000 (increased from £2,000)
• You must not be a homeowner
• You must not already be subject to another formal insolvency procedure
• You must not have had a DRO in the previous six years

These updated thresholds mean that thousands more people across England and Wales now qualify for a DRO who previously fell just outside the limits. If you have been turned down before, it is well worth checking again under the new rules.

For full details on the current eligibility criteria, the GOV.UK guide to Debt Relief Orders has the official information.

How Much Does a DRO Cost?

One of the biggest advantages of a DRO over bankruptcy is the cost. Filing for bankruptcy currently costs £680, which is a significant sum for someone already in financial difficulty. A DRO, by contrast, costs just £90. That fee can be paid in instalments if needed, and some charities may be able to help cover the cost in cases of extreme hardship.

The low application fee is one of the reasons DROs have become increasingly popular since their introduction. For many people on low incomes, spending hundreds of pounds on bankruptcy simply is not realistic, and a DRO offers a practical way forward.

What Debts Can a DRO Cover?

DROs can cover most types of unsecured debt, including:

• Council tax arrears
• Credit card debts
• Personal loans and overdrafts
• Catalogue debts
• Utility bill arrears (gas, electric, water)
• Benefit overpayments

Council tax arrears are one of the most common debts included in DROs. If you are struggling with council tax debt, a DRO could write off what you owe entirely, provided you meet the qualifying criteria.

Some debts cannot be included in a DRO. These include student loans, child maintenance arrears, social fund loans, and any debts you have taken on through fraud. Court fines, including magistrates’ court fines for criminal offences, are also excluded.

DRO vs Bankruptcy: Which Is Right for You?

Both DROs and bankruptcy result in your debts being written off, but they work in very different ways and suit different circumstances. Understanding the differences is important before you decide which route to take.

Bankruptcy may be more appropriate if your debts exceed £50,000, if you own property, or if you have a higher income. It is a more complex process that involves a court hearing and potential asset seizure. You can read more about how council tax bankruptcy works in our detailed guide.

A DRO is the better option if you are on a low income with little to no assets and your debts fall within the qualifying limits. It is quicker, cheaper, and does not involve a court appearance. The entire process is handled through an approved intermediary and the Insolvency Service.

Both options will affect your credit rating for six years and will appear on the Individual Insolvency Register. Neither should be entered into lightly, but for people who genuinely cannot repay their debts, they offer a legitimate route to becoming debt-free.

What Happens During the 12-Month Moratorium?

Once your DRO is approved, a 12-month moratorium period begins. During this time, several important protections kick in:

• Your creditors cannot contact you to demand payment
• No legal action can be taken against you for the debts included in the DRO
• Bailiffs cannot visit your property to collect on those debts
• Interest and charges on your debts are frozen

You do have responsibilities during this period. You must not take on any new credit of £500 or more without telling the lender about your DRO. You must inform the Insolvency Service if your circumstances change, for example if you start earning more money, inherit assets, or move to a new address.

If your financial situation improves significantly during the moratorium, your DRO may be revoked. In that case, you would become liable for your debts again. This is why it is important to be completely honest about your circumstances when you apply.

The Impact on Your Credit Rating

A DRO will stay on your credit file for six years from the date it was approved. During that time, you may find it harder to get credit, open new bank accounts, or pass financial checks for things like mobile phone contracts or renting a property.

That said, many people who apply for a DRO already have a poor credit rating because of missed payments and defaults. In those cases, the DRO itself does not make things significantly worse, and the fresh start it provides can actually help you rebuild your finances more quickly.

After six years, the DRO is removed from your credit file entirely. With careful financial management in the meantime, there is every chance you can rebuild a healthy credit score. Organisations like MoneyHelper offer free guidance on managing your money after a DRO.

Why DROs Matter More Than Ever in 2026

The cost of living crisis has pushed more households into financial difficulty than at any point in recent memory. Energy bills, food costs, and rent have all risen sharply, while wages for many workers have not kept pace. For people on low incomes, especially those relying on benefits or working part-time, even small debts can quickly spiral out of control.

Council tax is a particular pressure point. Unlike most other debts, councils have strong enforcement powers and can fast-track cases through the magistrates’ court. Low-income households across the UK are being hit hardest, and many do not realise that a DRO could wipe out their council tax arrears along with other qualifying debts.

The 2024 changes to DRO thresholds were a direct response to this growing need. By raising the debt, income, and asset limits, the government acknowledged that the old rules were too restrictive and left too many people without a viable route out of debt.

How to Apply for a Debt Relief Order

You cannot apply for a DRO directly. Instead, you need to go through an approved intermediary, which is a trained debt adviser authorised by the Insolvency Service. These advisers work at organisations like Citizens Advice, StepChange, and other free debt advice charities.

The process typically works as follows:

1. Contact a free debt advice service and explain your situation
2. Your adviser will assess whether you meet the eligibility criteria
3. If you qualify, they will help you gather the necessary information about your debts, income, and assets
4. Your adviser submits the application to the Insolvency Service on your behalf
5. The Insolvency Service reviews the application and, if everything is in order, grants the DRO

The whole process usually takes a few weeks from your first appointment to the DRO being granted. There is no court hearing and no need to attend any formal proceedings. For a broader look at the options available to you, our guide on taking control of council tax debt covers the full range of solutions.

Need Help With Your Debt?

If you are struggling with council tax arrears or other debts and think a Debt Relief Order might be right for you, get in touch with our team today. We can help you understand your options and point you in the right direction.

Disclaimer: This article is for general information purposes only and does not constitute financial advice. Debt Relief Orders are a formal insolvency procedure with long-term implications for your credit rating. You should always seek independent, professional debt advice before making any decisions about your finances. Free, impartial advice is available from StepChange, Citizens Advice, and MoneyHelper.