Cash-strapped Chester face the prospect of expulsion from the Football Conference for the "non-payment of football creditors''.
City have been placed under a player embargo by the governing body for their failure to meet required payments and have been told to pay the monies owed by October 26 or face expulsion.
City went into administration shortly after their relegation from the Football League last season and were only permitted to play in the Conference - albeit with a minus 25 point deduction - after brokering a deal with the Football Conference.
"In accordance with Membership Rule 11 - for the non-payment of football creditors - Chester City FC have been placed under an immediate player embargo,'' a statement on the Football Conference's official website read.
"Chester City FC has not complied with the terms of the compromise agreement set by the Football Conference to allow the club to participate in the competition at the commencement of the current season; and further to that fact, the club has been given seven days, operative up to 5.30pm 26th October 2009, in which to meet the said payment terms of that agreement, otherwise they face the threat of expulsion from the Football Conference.''