17 Dec 2014

Press Release: Local Authorities Get Tough on Council Tax Debt

Press Release: Local Authorities Get Tough on Council Tax Debt

 

The number of people being taken to court over personal debt has soared to more than 1,000 every day, according to new figures from Scotland’s bankruptcy body.

A report by Accountant in Bankruptcy has revealed that nearly 380,000 debtors have been the subject of court bids in 2013/14 – up 20% in just one year.

The rising number of court cases is being put down to increasing use of powers handed to local authorities to make it easier for them to recover debts with minimal legal costs.

However, Leonie Donald, Partner, believes the figures also provide proof that parts of the economy are still struggling to recover from the recession.

The number of court cases has risen by 49% in Lothian and Borders, from 76,439 to 88,070.

In Grampian, Highlands & Islands, it has risen by 33% from 42,770 to 56,883.

Cases are also up 21% in Tayside, Central and Fife and by 15% in Glasgow and Strathkelvin.

Miss Donald said: “There has been a large rise in the number of people being taken to court over debts this year, mainly because councils have been more proactive in recovering the money they are due.

The figures are worrying in that they highlight the difficulties that are being encountered by individuals in paying their council tax, which is an increasing concern for all those involved. It is also indicative of an economy still struggling to recover.

It is also perhaps an indicator that councils are taking a harder line in recovering arrears.”

The figures show a 20% increase in the use of Summary Warrants by councils over the year.

The Summary Warrant procedure is a shortened court process available to certain public creditors to pursue the amounts they are owed and is used, in the main, by local authorities. 

It involves an application being made to court by the council in respect of debts due by a number of debtors and for which no hearing is held.

Miss Donald added: “The introduction of these warrants has been welcomed by councils, because it means they can take court action to recover debts without having to pay any substantial legal fees.

However, it is bad news for people in debt, because it means councils can move fast to recover the money they are due – whether that be through freezing funds in bank accounts or bankruptcy.

“With potential interest rate rises around the corner, we could see the number of people struggling to cope with debt escalate further in 2014/15." 

Media Enquiries

For further information please contact Ryan Crighton, Director of Marketing, on 01224 337 454 or alternatively email rcrighton@acandco.com.

 

 

 

 



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