A national advisory group has condemned Bradford Council after it made a disabled woman bankrupt over an unpaid £1,100 council tax bill.

Naseem Raj, of Keighley, who receives Disability Living Allowance, faces losing her home as the size of her debt, due to the court proceedings, could soar to £20,000, the Bankruptcy Advisory Service (BAS) has warned.

The service says her case is one of the most shocking examples it has dealt with.

Gill Hankey, of the Hull-based organisation, said Mrs Raj, 38, who is cared for by her husband, was now exempt from paying council tax due to her mental health problems.

But the unpaid council tax bill of £1,171, which dated back to 2002, had resulted in Mrs Raj facing a minimum debt of between £10,000 and £20,000.

Ms Hankey said: "I spoke to the trustees and they were quite reasonable and agreed that this case was ridiculous.

"They pledged to attempt to keep their fees to a minimum but even so Mrs Raj will be faced with a minimum debt of around £10,000.

"She is unable to raise such a sum and, indeed, would struggle to raise the money to pay the original debt of £1,171.

"We deal with council tax bankruptcies all the time and have had numerous dealings with Bradford Council. I think it is absolutely ridiculous to bankrupt someone for a debt of just over £1,000," she said.

"Mrs Raj, who is already fragile due to her disability, is absolutely petrified and close to suicide over this.

"She is worried that her home will be taken from her and that she will be forced to sleep on a park bench.

"The level of stress she is under is immense. This is one of the more extreme cases we have seen and we wish to highlight it to prevent anything like this happening again."

Martin Stubbs, Bradford Council's assistant director, revenues and benefits, said: "We have every sympathy for Mrs Raj and only took this matter to court after she made and broke 30 arrangements to pay."

He added: "Since 2003 Mrs Raj has been entitled to full council tax rebate which means she pays nothing at all.

"We would like to re-assure council tax payers there are many ways we can help if people are struggling to pay and very rarely do things go this far.

"The implications of not paying were constantly pointed out to Mrs Raj. Since the bankruptcy order last June the matter has been in the hands of KPMG, the trustee in bankruptcy."

BAS has argued that Mrs Raj's physical condition means she has severe difficulty organising her affairs.

Councillor Ian Greenwood, the council's Labour group leader, described the situation as "outrageous". He said: "A public authority should ensure it acts in a proportionate fashion.

"Considering the size of the original debt, for this person to now face a possible debt of £10-20,000 is appalling.

"Everyone should pay their council tax but it seems like someone should have talked to this woman.

"To act in a way which causes an initial debt of £1,000 to soar to this level is totally irresponsible. If this was a private company behaving in this manner there would be outrage."

Jeanette Sunderland, leader of the council's Liberal-Democrat group, said: "My criticism would be levelled at the trustees KPMG.

"This firm seems to be profiteering from people in situations such as this. Its charges seem to be totally out of proportion.

"The council has created a lot of opportunities for Mrs Raj to address this issue but she has not done so."

Jennifer Miller, community advocate at Bradford and Airedale Mental Health Advocacy Group, said: "One of the things we find is that people suffering from severe anxiety or depression do not open their mail. People suffering with these illnesses have enough trouble just coping with the illness."

No-one at KPMG, the trustees of the debt, was available to comment.