The short answer
Yes — council tax arrears are a qualifying debt for a Debt Relief Order (DRO). Arrears owed when your DRO is approved are included, creditors (including the council) cannot take enforcement action during the 12-month moratorium, and if your circumstances haven't substantially improved by the end of it, the included debts are written off entirely.
For people on low incomes with few assets, a DRO is often the single most effective way to deal with council tax debt — it's low-cost, doesn't involve years of payments, and shuts down bailiff action completely.
Do you qualify for a DRO?
DROs are designed for people with little ability to repay. In England and Wales you qualify if:
- Your total qualifying debts are under £50,000;
- Your spare income is under £75 a month after essential household costs;
- Your assets are worth less than £2,000 (a vehicle worth up to £4,000 is allowed on top);
- You don't own a home (or any other property), in the UK or abroad;
- You've lived or worked in England or Wales in the last three years;
- You haven't had a DRO in the last six years.
The application fee is £90, and applications are made through an approved intermediary (a trained debt adviser) — you can't apply directly yourself.
Not sure if you're under the limits? Call 0161 820 1298. We'll go through your figures with you — and if a DRO is the right fit, we'll make sure you're connected with the right specialists to get it done. Where you're not suitable for the solutions we provide, we may refer you to one of our trusted partners.
How a DRO deals with council tax, step by step
- Advice and application. An adviser checks your eligibility, lists all your qualifying debts (council tax arrears included — get an up-to-date balance from the council, including bailiff fees), and submits the application to the Insolvency Service.
- Approval and moratorium. Once approved, a 12-month moratorium begins. The council and any enforcement firm must stop collection for included debts: no bailiff visits, no wage deductions for those arrears, no further court action.
- The 12 months. You don't make payments toward included debts. You must tell the Insolvency Service if your circumstances improve significantly (a windfall or big income rise can revoke the DRO).
- Write-off. At the end of the moratorium, included debts — council tax arrears among them — are written off. The council cannot pursue them again.
What a DRO doesn't cover
- Ongoing council tax — your current bill from approval onward remains payable as a normal living cost (check whether Council Tax Support can reduce it);
- Certain excluded debts: court fines, child maintenance arrears, student loans, and debts obtained by fraud;
- Secured debts, such as a mortgage (though home ownership rules mean most DRO applicants rent anyway).
DRO downsides to weigh
- A DRO appears on your credit file for six years from approval, and you're listed on the public Insolvency Register during the DRO plus three months;
- Restrictions apply during the 12 months — for example on borrowing over £500 without disclosing the DRO and on acting as a company director;
- If your finances improve substantially mid-DRO, it can be revoked and the debts revive.
DRO vs IVA for council tax debt
| DRO | IVA | |
|---|---|---|
| Best for | Low income, few assets, no home | Regular income, debts over £7,000 |
| Monthly payments | None | Yes — one affordable payment, ~5 years |
| Debt limit | Under £50,000 | No upper limit |
| Cost | £90 application fee | Typically £3,650, from monthly payments once approved |
| Council tax written off | After 12 months | On completion (~5 years) |
| Credit file impact | 6 years | 6 years |
See the full comparison across all options — including Debt Management Plans and bankruptcy — on our debt solutions page.
Frequently asked questions
How do I get a DRO?
Through an approved intermediary — a trained debt adviser who checks eligibility and submits the application for you, with a £90 fee to the Insolvency Service. Speak to us and we'll make sure you take the right route.
Does a DRO stop bailiffs collecting council tax?
Yes. From approval, enforcement for included debts must stop for the 12-month moratorium — and once the debts are written off at the end, they can never be pursued. If bailiffs are active while you prepare an application, Breathing Space can protect you in the meantime.
Do bailiff fees get written off in a DRO too?
Enforcement fees attach to the council tax debt, so where the arrears are included in the DRO, the associated bailiff fees are included in the write-off as well.
What happens to my current year's council tax in a DRO?
Only arrears at the date of approval go into the DRO. The rest of the current year's bill remains payable — but as a DRO applicant you're very likely to qualify for Council Tax Support to reduce it, which we can help you claim.