My wages have been arrested – what now?

Earnings arrestment is a form of diligence frequently taken by creditors in Scotland to recover unpaid debts. It involves taking money directly from the wages of a debtor who has failed to adequately deal with their debt.  This is done through an Earnings Arrestment Order (EAO) which is given to your employer and instructs them to deduct a given percentage of your wages and pay this money to the sheriff clerk who will then administer this payment to your creditor(s).

• Ensure you are not exempt from wage arrestment – Your first step is to ensure that the wage arrestment has been correctly applied to your situation. It’s worth noting that the wages of those who are self-employed cannot be arrested, nor can individuals who rely on state benefits have their income arrested. Serving members of the armed forces are also exempt, however, all other employed individuals could find additional deductions taken from their pay packets should they fail to keep on top of their obligations to creditors.
• Check the right amount is being deducted - The amount that can be taken direct from your salary through a wage arrestment is dictated by the salary you earn. The first £529.90 of your net monthly pay is protected and cannot be touched. Anything above this can be arrested and works on a sliding scale:

   o   Between £529.90 and £1,915.32 – An amount of £15.00 or 19% of earnings above £529.90, whichever is higher.

   o   Between £1,915.32 and £2,879.52 – An amount of £263.23 plus 23% of earnings above £1,915.32.

   o   Above £2,879.52 – An amount of £485.00 plus 50% of earnings above £2,879.52.

These figures are based on monthly net income amounts; there are alternative calculations if you are paid on a weekly or daily basis. In addition to these figures, employers can also subtract an additional £1.00 every time a deduction from your salary is made in order to cover the administrative costs incurred on their behalf.

• See if you can apply for a Suspended Attachment of Earnings Order – In certain circumstances you may be able to suspend a pending EAO but only if you can prove that you are likely to be subject to disciplinary proceedings, or even dismissal, at work should the EAO remain effective. This is most commonly the case for those that work in certain industries such as financial services or the legal sector. If this applies to you then you can apply to the court for a suspension of the EAO, but this must be done before the Order becomes effective.
• Consider a formal debt solution – Once your wages have been arrested there is little you can do to stop this without entering into a formal debt solution such as sequestration or a Trust Deed. Entering into such a procedure will put a stop to an ongoing wage arrestment; however, these will involve restrictions of their own including an inability to work in certain sectors, as well as a commitment to making a monthly contribution towards your outstanding debt.

As with most debt issues, it is highly advisable to take action at the earliest possible opportunity as this means there will be many more options open to you. Before your wages are arrested, you will not only be given warning of this, but also the opportunity to come to an alternative arrangement such as agreeing to a Time to Pay (TTP) plan. If this is not suitable in your circumstances then a more formal debt solution such as a Trust Deed or Debt Arrangement Scheme (DAS) may be more appropriate. Formal debt solutions can only be entered into under the guidance of a licensed professional, so taking expert advice at this time is crucial.

Scotland Debt Solution’s team of debt specialists have helped countless individuals across Scotland get a form hold of their personal finances and work their way out of debt. We can advise across a range of formal debt solutions including sequestration, DAS, and Trust Deeds. Call our expert team today on 0800 063 9250 to arrange a completely free no-obligation consultation and take your first step towards a debt-free future.