Earnings arrestment orders – what are they and how do I stop one?
How to stop an Earnings Arrestment Order
Have you received a letter from a sheriff officer such as Scott and Co or Stirling Park about an earnings arrestment order (also know as a wage arrestment) for unpaid council tax? Are you unsure what to do next? This article will explain what an earnings arrestment order is, why you’ve got one, how to stop an earnings arrestment and where you can get help with it.
When do you get an earnings arrestment order?
An earnings arrestment order is one of the ways that a council can recover unpaid council tax. Before an earnings arrestment order can be put in place, the council must have followed a procedure that is set out in law.
The first time and second times you miss a monthly council tax payment, the council will send you a reminder letter. The letters give you seven days to pay the outstanding amount.
If you do not pay your first or second missed council tax payment within seven days of receiving the reminder letter or if you miss a third payment, you will receive a final notice. The final notice will state that you have 14 days to pay the entire amount that is outstanding for the rest of the year.
If you miss a council tax payment for any reason, you may find it helpful to seek independent debt advice. Independent debt advisors such as Council Tax Advisors can provide free and impartial advice about how to sort out the problem.
If you do not pay your council tax after receiving a final notice or do not get in touch with the council to try to arrange payment, the council can apply for a summary warrant from the Sheriff Court.
The summary warrant will be sent to you by a sheriff officer.
Sheriff officers are private companies who have been given the power by the Sheriff Court to enforce court orders such as summary warrants. Councils hire sheriff officers to enforce summary warrants for unpaid council tax on their behalf. Two of the biggest firms of sheriff officers in Scotland are Scott & Co and Stirling Park, but there are many others and they can even be individuals working for themselves.
The summary warrant sent to you by the sheriff officer will include details of the amount of council tax you owe, plus a 10% penalty. It will also have details of the sheriff officer you need to contact to arrange payment of the debt.
When you receive a summary warrant, you have 14 days to get in touch with the sheriff officer and start to put a repayment plan in place. If you would like help with this, contact Council Tax Advisors who can negotiate on your behalf free of charge.
If you do not come to a repayment arrangement with the sheriff officers, they can ask you for information such as the name and address of your employer, your National Insurance number, your bank account details or the name and address of anyone else who is liable to pay your council tax with you. You must provide the information they request within 14 days or you may be fined.
At this point, the council will go back to the Sheriff Court to obtain a charge for payment. This usually lasts for 14 days. If you have not made arrangements to repay your council tax before then, the sheriff officer has the power to take the money you owe using the information you have given them. There are several ways they can do this. They can freeze your bank accounts, take money from your bank accounts or remove belongings from your home and sell them. They can also put an earnings arrestment order in place.
What is an earnings arrestment order?
An earnings arrestment order is an instruction to your employer to deduct money from your pay packet. Your employer automatically deducts a set amount from your wages and sends it to the court. This amount will be deducted from each pay packet until the debt is repaid. The court will decide how much money will be deducted from your pay packet each time. The total amount that you owe will be the amount of council tax that is outstanding, plus administration fees for the sheriff and your employer and interest.
The amount that will be deducted from your wages each time is calculated using a set formula. It depends on how much money you earn, including commission, bonuses and statutory sick pay. It doesn’t take into account any other debts or outgoings you may have. You will always be left with at least 60% of your net income (your income after tax). If your earnings change, so will the deductions.
Earnings arrestment orders cannot be placed on some people. If you are self employed, receive unemployment benefit or are in the armed forces, you cannot have an earnings arrestment order.
Before an earnings arrestment order is valid, all the steps in the previous section of this article must have been carried out. You must also have received a Debt Advice and Information Package (DAIP). This gives advice on dealing with debt and the options open to you. If you do not receive a copy of the DAIP, the earnings arrestment order is not valid.
An earnings arrestment order can have very serious consequences. Some employment contracts may say that an earnings arrestment order is a disciplinary matter. This may mean you could lose your job.
How can you stop an earning arrestment order?
There are several ways you may be able to stop an earnings arrestment order being carried out.
You can ask your council to put a repayment plan in place. If they agree to this, you can apply to the Sheriff Court for a suspended attachment of earnings order. However, if you don’t keep up the repayments you have agreed with the council, it can apply for another earnings arrestment order.
You may be able to claim that having an earnings arrestment order could lead to disciplinary action from your employer meaning that you could lose your job. This would mean that the council would not get the money that is owed to them.
You could consider a Debt Arrangement Scheme, which is a debt payment programme managed by the Scottish Government. When you have a debt payment programme (DPP) in place, you commit to repaying your debt based on your disposable income (the money you have left after paying all your bills) each month. A DPP can last any reasonable length of time, depending on the amount you owe and how much you can pay. You apply for a debt payment programme through an independent money advisor and they negotiate with your creditors (the people you owe money to) on your behalf. When a DPP is in place, all interest, fees, penalties or other charges owed are frozen. Your creditors are also prevented from taking any further action against you.
If you have debts of at least £5,000, you could consider putting a Trust Deed in place. A Trust Deed transfers your rights regarding your assets to a registered trustee. The registered trustee negotiates the repayment process with your creditors on your behalf. Each month for an agreed period of time, you will pay a sum of money agreed between the registered trustee and your creditors (the people you owe money to). The registered trustee must be a registered insolvency practitioner.
Where can you get help about an earnings arrestment order?
If you have received an earnings arrestment order, the most important thing to do is get help. Organisations such as Council Tax Advisors, which is the UK’s leading Council Tax advice organisation, provide all the help and support you need. First and foremost, their help will mean you are no longer alone. They have all the information you need at their fingertips and can advise on all the options open to you. They can negotiate with the council and the sheriff officer on your behalf. They can help to put affordable repayment plans in place. They may even be able to have your earnings arrestment order removed. And, in the case of Council Tax Advisors, all their services are free of charge. So if you have got problem debt or are worried about an earnings arrestment order, get help today. Independent and free advice from Council Tax Advisors is only a phone call away.