Understanding bank arrestment orders for debt in Scotland

A bank arrestment is a legal process in Scotland where a creditor (a company you owe money to) can freeze your bank account in order to recover a debt you owe. It's a form of diligence, a legal process for recovering debt, and requires a court order or a registered document before it can be put in place. The bank account is frozen, and funds in the account which are above a certain protected threshold may be transferred to the creditor to settle the debt.

Why would I get a bank arrestment against me?

Having your bank account frozen via a bank arrestment typically follows a lengthy battle on behalf of your creditors to get you to pay a debt that you owe. Bank arrestments are a serious form of creditor action and require legal involvement by way of a court order and is therefore not something that would be done as soon as you fail to make the necessary payments towards your debts.

Instead, a bank arrestment is typically the result of an individual repeatedly failing to repay the money they owe despite many attempts by the creditor to recover the debt. Essentially, a bank arrestment is one of the risks you take when you bury your head in the sand and do not deal with your debts.

What happens after a bank arrestment has been issued?

This court order, once obtained, will be served on your bank who must then freeze your account. If the creditor does not know which organisation you bank with, they can serve the order on multiple banks until they find the one your account is with.

While a bank arrestment order used to only be valid against bank accounts which were originally opened in Scotland, it is now possible in many instances for bank accounts opened elsewhere to be frozen by this type of court order.

Joint bank accounts can also be subject to a bank arrestment even if only one individual owes the debt. The full amount in the bank account will typically be frozen, however, you may be able to argue that the creditor is not entitled to the full amount if the debt only relates to one person named on the joint account. If you are in this situation, you should seek legal advice.

What happens to my bank account once has been arrested?

When a bank account is arrested, there is a ‘protected amount’ of £1,000 which cannot be taken to pay your debts. Money coming into your account from state benefits should also not be included in the frozen amount. You are free to use this money to continue covering your daily living expenses. Anything above the protected amount, however, is likely to be frozen and you will no longer have access to it while the bank arrestment is in place.

Bank arrestments are a two-stage process. The first stage is when your bank account is frozen; the second stage is when the arrested funds are transferred out of your account and given to your creditor.

This second stage requires one of two things to happen:

1. You give permission (via a signed mandate) for the arrested funds to be sent to your creditor

2. 14 weeks have passed and you have not lodged a successful objection to the arrestment

It may be possible to challenge a bank arrestment under certain circumstances. This includes if you can prove the bank arrestment will cause you and your family ‘undue hardship’, if you have been granted additional time to pay by the court, or if your creditor did not use the correct procedure when obtaining the bank arrestment order against you.

How can Scotland Debt Solutions help?

If you are struggling under the weight of mounting debt and you are worried your bank account may be frozen by way of a bank arrestment, you should make it a priority to seek expert debt advice.

The experts at Scotland Debt Solutions are here to give you the help and advice you need when it comes to dealing with your debts. Contact the team today for immediate support and guidance.