Last year saw over 5,000 petitions made for bankruptcy for homeowners in England and Wales by town halls due to council tax debt, which led to more than 1,000 people being declared bankrupt and having their assets seized.

The figures, which have been obtained under Freedom of Information legislation by the Liberal Democrats, show that households which originally owed just a few hundred pounds in council tax debt are being hit with debts reaching tens of thousands of pounds due as a result of the bankruptcy action taken against them.

Regarding those who had been made bankrupt by council tax debt, Julia Goldsworthy, the Liberal Democrats local government spokesman, said: “Public bodies should do everything they can to ensure that bankruptcy is avoided where possible.”