The Rules of Earnings Arrestment
Earnings arrestment, known as attachment of earnings in England and wages arrestment in Scotland, is a way for creditors to recover debts. An earnings arrestment means that a set amount will be deducted from a debtor’s salary and paid to creditors each month.
What is an Earnings Arrestment?An earnings arrestment is basically an amount of money deducted from a person’s salary that will be paid to creditors. The debtor’s employer will be the one who deducts the financial amount from the debtor’s salary. Debtors will be made aware that an earnings arrestment may be applicable and will be sent an N56 Attachment of Earnings Form from the court. The creditor must have a judgement against the debtor applied through the court known as a County Court Judgement (CCJ). If the CCJ has been granted by the court the creditor can then apply for an earnings arrestment.
Details to Be Included in Attachment of Earnings FormOnce a creditor has applied to have the debtor’s earnings arrested an N56 will be required to be completed by the debtor. Details that will be required are name, address and the number of children the debtor has. The debtor’s employer’s details will also be required as well as income and expenditure. A full list of the debtor’s existing debts will also be required. Details of how much are paid to other creditors will also be used during the earnings arrestment assessment.
Stopping the Earnings Arrestment ProcedureIt may be possible to stop the arrestment of earnings when the N56 form is received. There will be a section where the debtor can make a request to make an offer of payment towards the outstanding debt. Whether or not the creditor accepts this amount will be dependant on the offer made by the debtor. It may be the case that an employer will not look favourably on having to arrest an employee’s wages due to debts. This could also have a detrimental effect on future job promotions within the employment company.
Requesting a Suspended Attachment of Earnings OrderA suspended attachment of earnings order is a request to the court to stop the earnings arrestment temporarily. Reasons will be required as to why this is a step that should be taken by the court. This request will also be provided on the N56 form. Courts will use the information on the N56 to make their assessment as to whether earnings arrestment is applicable. The court cannot apply an earnings arrestment if the debtor’s earnings are under a certain amount, known as a protected rate.
Time Frames for Sending Back an N56Debtors have eight days within which to complete and send back the N56 Attachment of Earnings form to the court. If the debtor refuses to complete and send back the form then the court will order bailiffs to serve an order to complete the form. If the debtor does not reply then they will be sent a notice to appear in court and explain their actions. Failure to appear at the court can result in an arrest warrant being issued for the debtor. The end result could mean the debtor is arrested and fined or sent to prison for 14 days for failure to follow court instructions.
Challenging and Earnings ArrestmentIt is possible to challenge an earnings arrestment. If the debtor thinks the amount deducted from their salary is too high then they will have 14 days to challenge. To challenge the decision the debtor will have to apply in writing and appear at a private hearing in a county court. The debtor will then have to explain their disagreement to a judge giving his or her reasons as to why they feel the earnings arrestment is wrong. The Citizens Advice agency will be able to provide an earnings arrestment calculator to assess how much can be deducted.
The arrestment of earnings process should be taken seriously. There can be severe consequences for those who do not follow the process and fail to complete the N56 form. If at all possible it will be beneficial to offer some form of payment before the matter reaches employers. Many employers are sympathetic to employee’s problems, and unmanageable debts are now a common problem. But stopping the earnings arrestment process before employers are aware can be undertaken by offering some form of payment to creditors.