Diligence against earnings – Information for Scots in debt
February 10, 2017
Diligence against earnings is a collective term for the ways creditors can deduct money directly from your salary in order to enforce the payment of a debt. The three methods are: earnings arrestment, current maintenance arrestment and conjoined arrestment orders.
Earnings Arrestment (EA) – This is the most common type of arrestment order in Scotland. Earnings arrestment is used to make a deduction from your earnings for enforcement of a single debt. The deduction to be made from your employment earnings is calculated according to a set of tables that recover a percentage of the debt according to the level of earnings in the pay period. Earnings arrestment is a serious step for a lender to take and will only be considered once all other avenues to obtain repayment have been exhausted. An earnings arrestment order will not come out of the blue; rather this will be the final step in a long process which involves the lender being granted a court order. Before this can happen, a Charge for Payment (this is a final notice to pay which gives you 14 days to settle the outstanding debt in full), must have been issued and subsequently expired.
The only exception to this is where the debt is being pursued by a Fines Enforcement Officer for an unpaid court fine; in this instance no Charge for Payment is required and your earnings can be arrested automatically.
The amount that can be taken from your wages hinges on how much (and how often) you’re paid. There is a minimum amount you will be allowed to earn before a percentage can be taken, which currently stands at £494.01 per month or £113.68 per week. The deductions from your pay packet will continue until the debt is paid in full.
Current Maintenance Arrestment (CMA) – A current maintenance arrestment is used to enforce a continuing maintenance obligation, such as a court awarded divorce settlement or child maintenance payment. A CMA will only be used if the debtor has failed to keep up with their obligations and has fallen behind on the payments they are required to make. As with an earnings arrestment, the order is served on the debtor’s employer and deductions are made directly from earnings.
Conjoined Arrestment Orders (CAO) – A conjoined arrestment order may be made if an individual has two, or more, of the same type of arrestments (either EA or CMA) running at the same time. A CAO combines these payments into one. If an individual has one EA and one CMA, then these will continue as separate payments. With a CAO, the amount taken from your salary is passed to the court where it is then divided between the creditors on a proportional basis.
If you are struggling with debt, Scotland Debt Solutions can help. We will quickly assess your situation, and advise on all the options available to you. Our experienced team work from four offices around Scotland, and are available for same-day consultations.
The start of a new year is the perfect time to take stock of your finances and put plans in place for a financially savvy year ahead. While you may feel your problems are insurmountable, there are always things you can do to help, most of them surprisingly easy. Here are 7 ways you can […]
If you have credit card debt which is attracting a high level of interest, moving this balance onto a lower interest card could save you a considerable amount of money. This process is known as a ‘balance transfer’, and if done correctly, this process could save you money and also reduce the time it takes […]
Many thousands of young Brits are being actively encouraged towards taking on debt and spending borrowed money even before they reach their 18th birthdays. That’s according to the price comparison website comparethemarket.com, whose research suggests that roughly one in four 16 and 17 year olds in the UK have been offered credit cards or asked […]
If you’re in serious debt with no hope of repaying your unsecured creditors, you don’t have to wait for a creditor to take legal action against you. You may be able to take matters into your own hands and apply for sequestration (bankruptcy in Scotland). This also prevents your situation from worsening. There are two […]
If you’re looking to save some money it’s a good idea to make a detailed budget that lets you see where your cash is currently being spent, and offers an overall view of your finances. You’ll need to collect together your income and expenditure details, including annual costs such as insurance, car expenses, birthdays and […]
Scotland has a number of formal debt solutions that can help you deal with a difficult financial situation. It’s advisable to take action as soon as possible, however, to prevent your levels of debt escalating when interest and other charges are added. Obtaining professional advice is key in this respect. An approved money advisor or […]