As you will probably be aware of by now, when it comes to debt there are many grey areas that can be difficult comprehend in times of hardship. There are a huge number of cases with deal with each year that have resulted from creditors or local government bodies not communicating properly with members of the public, and attachment of earnings is a prime example of this.
If you find yourself in debt and have not been able to get yourself on a payment plan that suits both you and your creditor, there is every possibility that they may have already taken court action against you. For the most part, they come in the form of a County Court Judgement (CCJ) amongst other local bills, orders and warrants. This is essentially an official document that states the debt, however large or small, must be settled by a certain date. If it isn’t, the creditor has license to take further action to reclaim the monies that are owed to them.
Of course, this is a process than can take many forms. One of the most controversial of which is what is known as an attachment of earnings order. This could be issued to you for any number of things – credit debts, such as bank loans, hire purchase agreements and credit cards, are a main cause of this, just as is the case with rent and mortgage arrears. What people are less aware of, however, is that this can be applied to debts owed to government bodies, such as income or council tax.
This misconception is perhaps rooted in how we perceive the role of the government. Politicians in parliament are quick to constantly remind us that they are here to protect and serve the country, so when we find our wages are being taken out of our bank accounts by the representatives of these people is does not sit well with the majority of the population. Combined with a feeling of invasion of privacy, it is a recipe for frustration and confusion.
The attachment of earnings order stops money from your wages reaching your account, and instead your employer is instructed by law to ensure that a percentage of your money is redirected to your creditor. It’s worked out through a strict formula, meaning there is little room for negotiation once the order is in place. No other debts or outgoings are taken into consideration – making the order even more controversial – so your overall wage packet will be reduced by anything up to 40 per cent. For people whose income fluctuates due to the frequency of work (common for people on zero hour contracts or freelance workers, for example), the amount may change month on month.
Another factor people must be aware of is that the arrestment of earnings process can essentially last indefinitely. These may continue later down the line when all repayments have been made if you have ongoing maintenance payments that still need to be met, so it is always worth keeping in close contact with an experienced advisor to assist you as your circumstances change.
This is why is absolutely vital that when in these situations, you do not let council tax debts get this far. Here at Council Tax Advisors, we’ve got a team of financial experts on hand to ensure that you are equipped with knowledge that will prove invaluable later down the line. The solution is simple – get valuable advice, and get it now.