A Liability Order is the 7th and final step a council will take when it cannot collect Council Tax arrears. The council approaches the court to officially recognise the debt and it opens the way to all manner of nasty things including attachments of earnings, reducing benefits and the worst of all, county court Bailiffs. The latter pull no punches when it comes to collecting council tax, as it is viewed in such a serious light. If you are having difficulties paying council tax pick up the phone and ask for an arrangement, but don’t ignore the problem. It is possible to include council tax arrears in a bankruptcy, but if a Bailiff has made a payment arrangement with you following the issuing of a liability order, you might still have to honour it.