What is Attachments of Earnings and how does it work?

An Attachment of Earnings, or Earnings Arrestment as it is known in Scotland, is part of the ‘diligence’ process available to creditors who have been unable to collect their monies despite obtaining a court order.

They must have sent a charge for payment to you as their debtor, along with a Debt Advice and Information Package (DAIP). The DAIP explains your rights in this situation, lets you know where to go for advice, and without it the charge for payment is not legal.

One exception to this is in the case of court fines, in which case a charge for payment is not required, but the Fines Enforcement Officers must still send you a DAIP.

How does Attachment of Earnings work?

Attachment of Earnings allows your creditor(s) to access part of your wages in order to repay their debt. Strict rules are in place regarding how much can be earmarked for debt repayment in this way – a particular worry if you have more than one creditor chasing you for payment.

A court officer will send the Earnings Arrestment to your employer stating how much should be taken, and you should also receive a copy. Your employer is entitled to make an administrative charge of £1 each time they carry out the instructions, which may be daily, weekly or monthly depending on your contract of employment.

Additionally, there may be a clause within your employment contract stating that being in debt or entering formal insolvency are disciplinary matters. This is the case for prison and police officers, but if you work in the financial or legal sectors it could also be an issue. On a positive note, the fact that you could lose your job if an Attachment of Earnings is issued, may be a negotiating point as without an income your creditor is less likely to recover any of their debt.

Debtors are protected by legislation

The Debtors (Scotland) Act, 1987 sets out the amounts to be deducted, and ensures that a minimum level of income remains available to you as the debtor. Statutory tables provide the formula to calculate each payment, and these are updated every three years to reflect changes in national pay scales. The Bankruptcy and Diligence (Scotland) Act, 2007 updated some of the rules surrounding Earnings Attachment, as described below:

• Your employer must let you know the amount of the first deduction from wages, and when it will be taken.
• Employers are required to provide an annual statement of deductions to their employee and the creditor. If this is not provided, your employer may face a fine.
• Other employer obligations include providing information about your new employment to the creditor(s) should you leave your job.
• It is also incumbent on you as a debtor to give notice to your creditor about any changes in employment.
• You must have received a Debt and Information Package within 12 weeks of commencement of Earnings Arrestment.

If you come to an informal arrangement with your creditor, or enter a formal insolvency procedure such as a Trust Deed, you should be able to stop the Earnings Arrestment. We can advise on the most suitable course of action in your circumstances.

Scotland Debt Solutions helps residents in Scotland to become debt free. We have more than 60 debt experts working from local offices around Scotland, and can arrange a free initial consultation to discuss your financial situation.