An earnings arrestment order is a type of diligence that allows creditors in Scotland to pursue outstanding debts through judicial action. The creditor must get a court order from the local court instructing the debtor’s employer to deduct money from their net earnings. These monthly deductions are subsequently transmitted to the court, which ultimately distributes the funds to the creditor who owes the money.
The amount taken is determined by the amount owed and the amount you earn. It will continue until the entire loan has been paid off. If the employer does not follow the directions, he or she will be held liable. If you move jobs, you must inform your new boss about the earnings suspension.
In a word, it automates creditors’ and borrowers’ debt payback processes by deducting money from their net wages before it reaches their bank account. Earnings arrestment is a late-stage tool for collecting unpaid debts that are frequently utilised to collect overdue Scottish council tax debt.
What is a wage arrestment in Scotland?
A wage arrestment is another name for an earnings arrest. Throughout our guidance, we’ll use the phrase wage arrestment to refer to an earnings arrestment.
Is a wage arrestment the same as an attachment of earnings?
South of Hadrian’s Wall, a wage arrestment is known by another name. A similar technique of debt enforcement is employed in England and Wales, where automatic deductions are taken from the debtor’s income, but it is known as an attachment of earnings order. Only after a CCJ has been issued for the debtor to repay – and has been ignored – may these orders be granted by the local county courts.
The creditor may not choose to enforce the obligation in this manner, just as in Scotland. Other solutions may be more appropriate, particularly if the debtor is unemployed.
When can a wage arrestment be used?
A wage arrestment can be used to collect a variety of debts, including consumer credit like as loans and credit card bills, as well as council tax obligations and even HMRC debt.
Between 2017 and 2018, a Scottish debt solutions supplier claims that about 250,000 wage arrestments were used. Approximately 200,000 of them were used to collect overdue council tax arrears, while 45,000 were used to pursue consumer credit debt. From these figures, it’s evident that pay garnishment is mostly – but not only – a form of debt collection for council tax debt.
What is a charge for payment?
An earnings arrestment is only used to stop your wages from being garnished at the end of the debt collection process. Before applying to the court for this sort of court order, the creditor must go through a rigorous debt collection process that allows the debtor to pay directly.
Sending you a charge for payment is one of the steps performed before asking for money to be deducted from your salary. This is a legal demand for you to pay back a loan. The creditor must serve the demand for payment with sheriff officers, who will give the debtor 14 days to pay or contact the sheriff officer to discuss an acceptable debt settlement.
The charge for payment can only be served by Sheriff officers within 12 weeks of the day you received the debt advice and information package.
Dealing With Wage Arrestments? | Can a Wage Arrestment Be Stopped?
Are you wondering about how many days a bailiff legally hold your vehicle for? In this guide we’ll give you all the information you require to be aware of. Being faced with the possibility of having your vehicle locked can be an overwhelming scenario, however understanding your rights will ease some of the anxiety. When bailiffs clamp your vehicle, they typically are doing so in the course of enforcing debts or a the court’s order. But, they are not able to lock your vehicle indefinitely. The time period they are able to keep your car in a clamp varies based on conditions and specific laws that applies to your area of jurisdiction. When deciding what time the bailiff has to lock your vehicle for various factors are in consideration, such as the nature of debt, value of the debt and the particular circumstances surrounding the situation. It’s important to become familiar with your rights as well as the restrictions imposed by law on clamping your car to make sure your rights are not violated. In this post we’ll go over the standard durations for clamping and discuss the relevant laws, as well as provide some advice for handling the situation when your vehicle is being clamped. Keep an eye out for more information about your rights as well as how many days a bailiff is legally allowed to allow your car to be clamped.
What are debt advice and information package?
The debt advice and information package is a document designed to assist debtors who are unable to repay their debts. It informs them of options for repaying their debts to one or more creditors. It outlines the differences between legal and informal debt solutions, such as a Trust Deed or a Debt Arrangement Scheme.
If the creditor plans to take additional action to recover the debt, the pack must be given to the debtor. They can only utilise an earnings arrestment if the debtor received a debt advice and information package during the previous 12 weeks.
How will the sheriff court serve the charge for payment?
Sheriff’s deputies usually deliver the charge to your home for payment. They will simply post it through your letterbox if you are not at home. They may choose to transmit the document by recorded delivery to save time.
This is a legal document, not a request for payment like others; you should respond within 14 days and seek free debt assistance.
If you do not pay the money after benign served the charge for payment, the local sheriff officers may be able to:
- Use a wage arrestment to make deductions from your wages
- Freeze your bank account
Creditors can use the wage arrestment to make you bankrupt too, known as sequestration in Scotland.
What income does an earnings arrestment cover?
A wage arrestment is a method of deducting money from a person’s earnings. This is simple for the majority of individuals. However, if you receive other payments or commissions as part of your job, you could wonder if this revenue is included.
All bonuses and commissions are considered part of your job income and can be deducted. Even statutory ill pay is subject to the earnings attachment if you receive it.
If you simply get statutory ill pay and nothing more, you won’t have to pay anything because your salary is below a certain threshold before any deductions are made. Statutory maternity or paternity pay, on the other hand, cannot be deducted.
How much is paid back on a wage arrestment?
We have tables to explain how much is paid back, it is determined by the wages earned by the debtor.
Different tables are depending on if the debtor gets paid, daily, weekly or monthly |
Daily rate
£17.42 or below = NIL
Between £17.43 and £62.97 = 50 pence or 19% of earnings above £17.42, whichever is more
Between £62.98 and £94.67 = £8.65 + 23% of earnings above £62.97
£94.68+ = £15.95 + 50% of earnings above £94.67
Weekly rate
£122.28 or below = NIL
Between £122.29 and £442 = £4 or 19% of earnings above £122.28, whichever is more
Between £442.01 and £664.50 = £60.75 + 23% of earnings above £442
£664.51+ = £111.92 + 50% of earnings above £664.50
Monthly rate
£529.90 or below = NIL
Between £529.91 and £1,915.32 = £15 or 19% of earnings above £529.90, whichever is more
Between £1,915.33 and £2,879.52 = £262.23 + 23% of earnings above £1,915.32
£2,879.52+ = £485 + 50% of earnings above £2,879.52
Earnings arrestment and employment contract
Some employers include a clause in their employment contracts that being in debt is a disciplinary matter, and there may be a risk that you will lose your job. This is often the case with employers in the finance industry, the police force, and prison service.
Summing-up
Shergroup specialises in helping you recover your money from your debtor. Our debt recovery solutions are designed keeping in mind to help business owners across the UK so that they can operate peacefully without any cash crunch. Whatever you are in your process our NO COLLECT NO FEE service is simple to use and completely FREE until the point of collection. We will quickly assess your situation and advise on all the options available. Use our No Win No Fee solution to instruct us, click on the link below and upload your documents, fill-up the form and pay our fee. We will help you recover your debt.
https://shergroup.com/product-page/cashflow-b2b-no-win-no-fee-debt-collection/
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