16/10/2018

My wages have been arrested: Frequently Asked Questions.

16/10/2018

My wages have been arrested: Frequently Asked Questions.

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Wage arrestments, or as they are properly known, earning arrestments, are carried out in Scotland by sheriff officers.

An Earnings Arrestment Order (EAO) instructs an employer to deduct money straight from your wages either daily, weekly, fortnightly, or monthly, depending on the frequency with which you are paid.

Find out if you qualify to write off up to 75% of your unsecured debts using our debt assistant.

They are also one of the most common types of formal debt recovery used and are continuous. What this means is unlike other forms of debt recovery, they are not one-off events, they continue until all the debt is paid in full.

Wage arrestments, however, can only occur in certain types of situations, so knowing what those situations are can help you identify when you are a risk of having one executed on your wages. If you face having your wage arrested it’s also important to be aware that there is government approved solutions that could stop action being taken.

When can I get a Wage Arrestment?

Earning arrestments only take place in certain circumstances. These are when a creditor has taken you to court and obtained a court order, or in the case of council tax debt or tax debts owed to Inland Revenue, they have served on you a summary warrant.

They can also occur in certain other cases without going to court, when you have taken out a loan with a credit union or signed a lease with a landlord and agreed to a process known as summary diligence. This basically means the debt is registered for execution with the court.

This allows sheriff officers, without a court hearing, to recover the debt. This process, however, cannot be used for consumer credit debts, such as overdrafts, credit cards and personal loans (unless they are with a credit union).

Regardless of what procedure is used, earning arrestments must always be preceded by a sheriff officer serving on you a Charge for Payment. This is a legal document that gives you 14 days to pay your debts in full. If you fail to, then the sheriff officers can arrest your wages.

How does an Earning Arrestment work?

How wages arrestments work is the sheriff officer gives your employer what is known as an earning arrestment schedule. This instructs him or her to deduct from your wages each payment day the specified amount in the wage arrestment tables.

How much this is, depends on how much you are earning.

In every case though there is a minimum protected amount that they cannot arrest.  So, for example if you are paid monthly, the first £494.01 cannot be arrested.  For amounts over and above that, they can take 19%, or £15, whichever is the highest, up until you earn £1,785.61.

When you earn more than that, a higher percentage applies.

Your employer can also apply a 50 pence charge for administering the wage arrestment.

Can my employer refuse to execute the Earning Arrestment?

No. If an employer fails to arrest your wages once lawfully instructed by a sheriff officer, they can be held liable to the creditor for the amount that they should have taken off your wages.

They can then be taken to court themselves and ordered to pay the amount they should have or face the sheriff officers themselves. For this reason, employers must arrest your wages when told to do so.

Can you have you Wages Arrested twice?

Second and even third wages arrestments are possible and are known as conjoined earning arrestments.

This can happen when you owe more than one-person money, and several have arrested your wages at the same time. It does not, however, mean you pay more, but instead your employers pays the money over to the sheriff clerk in your local sheriff court, who divides it up and distributes it to the creditors.

What happens if I change jobs?

If you change your job, the earning arrestment stops, as you will have no earnings for your previous employer to deduct your wages from.

However, your previous employer can be instructed to supply details of your new employment to the sheriff officers where it is known, possibly because they gave you an employment reference.

The wage arrestment, therefore, can follow you.

How can you prevent an Earning Arrestments?

Obviously seeking debt advice is the best way to avoid an earning arrestment, particularly if you are struggling with problem debts, but there are some legal steps you can take, and Carrington Dean advisers can advise you on this. Government-approved debt relief solutions can help prevent wage arrestment action being taken as well as write off unaffordable debt.

Statutory Moratoriums

First, you can register what is known as statutory moratorium by speaking with a money adviser. This is important, particularly if you have had a Charge for Payment served on you and you know you are at risk of having your wages arrested. It gives you six weeks protection from any form of legal recovery action and gives you a chance to seek advice

Time to Pays

You also usually get two opportunities to apply for what are known as time to pays and if approved by the court, prevent an earning arrestment being used against you.

A Time to Pay Direction is the first type you get an opportunity to apply for and this is when the court action is raised against you. The form to apply for a Time to Pay Direction is included in the court paperwork.

The second opportunity is to apply for a Time to Pay Order, which is only possible after a Charge for Payment has been served.

Once you have applied for a Time to Pay, you cannot apply for another.

The Debt Arrangement Scheme

If you are already in a Debt Payment Programme in the Debt Arrangement Scheme, and the debt that you are pursued for is one that is in your programme, you cannot get your wages arrested for this debt.

Alternatively, if you apply for Debt Payment Programme and it is approved, your earning arrestment is lifted immediately.

Unlike Time to Pays the Debt Arrangement Scheme has many advantages, in that it freezes interest and charges and allows multiple debts to be dealt with at once. It also is usually allowed for longer, so if you are thinking of applying for a Time to Pay, you may be better seeking advice first.

Bankruptcy and Protected Trust Deeds

Both bankruptcy (or as it is known in Scotland, sequestration) and Protected Trust Deeds prevent wage arrestments, or if they are applied for after your wages are arrested, have the effect of lifting it once they are approved.

If you have a wage arrestment and would like to discuss it with an approved money adviser, or if you think you may be at risk of one, contact Carrington Dean on 0141 326 0399

You could write off up to 75% of unsecured debt with our debt assistant.

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