What Happens During an Attachment of Earnings Order?

An attachment of earnings order directs your company or employer to redirect funds directly from your wages to repay debt. Your employer transfers the money to the court that issued the order. The court will then forward the money to your creditor.

An attachment of earning differs from a direct earnings attachment or DEA. In DEA, you are not required to attend to court if you have tax credits or tax overpayments or in the presence of benefits.

How to answer to an attachment of earnings order notification?

You must take the necessary response when you receive a letter from the magistrates’ court. This happens when your creditor applies for an attachment of earnings order.

The letter will constitute an N56 form for replying to the order. This is referred to as the ‘statement of means’. Once you receive this form, you need to fill it with essential details. After completing the information required, you have to return it within 8 calendar days with a copy of your latest wage slip.

Failure to reply will result in you getting summons to attend the court hearing. If you continue disregarding the court’s letter you could be prosecuted. You can also appeal to the court at a succeeding date to discontinue the attachment of earnings.

An attachment of earnings can solely be dictated by the court if:

  • you’re hired by someone else
  • you’re taxed is on a ‘pay as you earn’ or PAYE
  • when you’re receiving an occupational pension or tax credits

How much should I pay on an attachment of earnings?

The value obtained by an attachment of earnings is established by the court. They will arrange a secured minimum value of income that you must obtain every month. This is described as the protected earnings rate. The attachment will simply be secured from your income over this cost.

Your creditor can’t get an attachment of earnings order if your disposable income is under the protected earnings rate. You need to notify the creditor immediately if you lose your job or if you have a change of career or job.

Can I stop an attachment of earnings order?

You can request to suspend the attachment of earnings order by ticking a box on N56 form. The N56 form is sent along with the order and for you to suspend the order, you need to provide reasons.

Once the court grants your reasons for suspending the attachment of earnings order it is going to be under the agreement to secure payments. You can pay your creditors directly than the court. As soon as the order is suspended, the money will no longer be taken out from your wages unless you fail to comply with the agreed arrangement of payments and your employer will not be notified.

How an attachment of earnings influence my debt solution?

You may have to reach out to your DMP provider when you receive an attachment of earnings order. This is because your attachment to earnings order can mean lesser disposable income. Your DMP provider will have to examine your budget and check whether monthly debt payments are still feasible. They can also determine an alternative to suspending or stop the attachment of earnings order.

Moreover, if your previous outstanding debt is included in an IVA or Individual Voluntary Arrangement, your creditor should not attempt to secure an attachment of earnings order. If this happens, you may need to contact your IVA supervisor, who will take action to suspend the order.

On the contrary of the debt was not included on an IVA, you still have to reach out to your supervisor and review further options that are available for you. This way, you can possibly reduce your payments, making it affordable once your creditors approved it.

If you have declared bankruptcy, you must contact your trustee to stop the attachment earnings order. However, if you’re on a DRO or debt relief order, you might need to check if the debt is included in your DRO. If it’s included, simply send a copy of your DRO to the creditor to stop the order. If it’s not included, you can contact the Insolvency Service. Moreover, your DRO may be canceled if the debt total is over £20,000.

Implementing an Attachment Of Earnings Orders

CCJs to an Attachment of Earnings Orders

If the creditor holds a CCJ for you, your creditor can apply for an attachment of earnings when you fail to pay the required amount.

Setting up Attachment of Earning for Council Tax Arrears

If you have arrears in your council tax, your local authority can set up an attachment of earnings by contacting your employer. A maximum of two council tax arrears can be deducted from your wages at the same time. If your arrears in council tax are worth 2 years, bigger amounts might be deducted from your wages.

Child maintenance arrears to a deduction from earnings order

Your arrears in child maintenance or child support can also be taken out from your wages through a deduction of earnings order. This works differently since it’s being set up by the CMS and not by the court. The CMS will impose a protected minimum amount of earnings that you are entitled to get every month. The attachment will be compensated from earnings beyond this amount.

Paying Criminal Fines in Installments

Magistrate court can also take criminal fines from your wages. This amount is a set percentage out of your income. This means the more you earn each month, the higher amount can be taken out from your wage.

This is the reason why its important to attend the hearing and comply with a court summons. You can take pieces of evidence to the court which involves your income and expenses. This way they’ll have an idea of how much you can afford debt payments each month. Other than this, the court can still issue an attachment of earnings order when you fail to settle previous court fines.

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