Local Authorities most likely to use Sheriff Officers
New statistics produced by the Scottish Government have revealed that Scottish Local Authorities are more likely to arrest the wages and freeze the banks accounts of those struggling with debts, than any other creditor.
The Scottish Diligence Statistics, which are produced by the Accountant in Bankruptcy’s office, show that for the financial year 2016-17, Scotland’s local authorities carried out more than 68,000 earning arrestments for non-payment of council tax.
This was ten times more than the number of attempted wage arrestments carried out by other creditors, and 180 times more than the number attempted by HMRC.
The figures also show that when it comes to bank arrestments, Scottish Local Authorities attempted to freeze the bank accounts of people struggling with council tax bills more than 149,000 times.
In comparison, other creditors owed money for bank loans and credit cards only made just over 22,000 attempts.
HMRC often accused of being one of the UK’s most aggressive creditors, only made 6,765 attempts.
Exceptional Attachment Orders
The figures also show the practice of sheriff officers attempting to enter people homes in Scotland to seize goods is still alive and well, even if it has been abandoned by governmental creditors.
Local authorities, for example, have not executed what is known as an exceptional attachment order since 2011-12; whilst for HMRC, the last time they executed one was in 2013-14. In comparison, however, ordinary, non-government creditors executed 124 in 2016-17.
Exceptional attachment orders, previously known as poinding and warrant sales, are controversial and were widely condemned during the poll tax non-payment campaign of the late 1980s and early 1990s.
The other most common type of enforcement procedure use by sheriff officers, the statistic shows, is what is known as attachment orders. These orders allow property, kept outside someone’s home, such as cars, or in business premises, to be seized and sold to pay off debts.
Like with exceptional attachment orders, this was shown to be a procedure most likely to be used by non-government creditors, who made just over a 1,000 attempts to seize goods; whereas HMRC only attempted it 644 times and local authorities only on 280 occasions.
Charge for Payments
Local authorities also were shown to be far more likely to serve a charge for payment on those that fell behind with their council tax payments, instructing sheriff officers to serve over 164,000 in 2016-17. The least likely to use the procedure was HMRC, serving just over 13,000; whilst ordinary creditors served over 67,000.
Charges for Payments are legal documents that normally must be served by sheriff officers before they attempt any other enforcement procedure and give those in debt 14 days to pay their debts off in full. If they fail to do so, the sheriff officer can then attempt any of the enforcement procedures listed above or attempt to sequestrate (bankrupt) the debtor.
What the diligence statistics do not show, however, is how many of the attempts were unsuccessful.
Often procedures will fail as the debtor does not have enough money in their bank account when it is arrested (only amounts over £494.01 can be frozen), or they do not earn enough money. Likewise sometimes when attachments are used, if the person’s car is worth less than £3,000 and they can show they have a reasonable requirement for it, then it is protected; or if the car is subject to a hire-purchase agreement, or personal contract plan (PCP), then the sheriff officers are not allowed to take it.
What the statistics also don’t show are how many people, when faced with the procedures from the sheriff officers, sought advice and applied for a Protected Trust Deed, Bankruptcy or Debt Payment Programmes under the Debt Arrangement Scheme.
All these solutions would have stopped any further attempts by the creditors and sheriff officers to enforce the debt using any of the enforcement procedures above. They would also have lifted the enforcement procedure if it had already been applied and the person then sought advice from a money adviser.
Stephanie Chapman, speaking on behalf of The Carrington Dean Group commented on the report,
“People must realise that when they receive demands or notifications from Sheriff Officers, they cannot ignore them. They have legal powers to recover debts and this can involve freezing wages and bank accounts, or even seizing people’s cars or entering their home. However, approved money advisers and licensed insolvency practitioners also have powers and can act very quickly to protect someone facing the sheriff officers, such as using the statutory moratorium procedure, which gives people six weeks breathing space”.
“When faced with the sheriff officers, our advice is to seek advice, as there are solutions and it is not necessary to suffer in silence”
If you are worried about sheriff officers or have recently had your wages arrested or bank account frozen, speak with a Carrington Dean adviser on 0141 326 0429.