Chamberlain McBain - Earnings Arrestment - Debt Recovery Scotland

Earnings Arrestment

Earnings arrestment, current maintenance arrestment and conjoined arrestment orders are ways for creditors to enforce the payment of debt. These arrestments, known collectively as diligence against earnings, allow a creditor to instruct a debtor's employer to make a deduction from the debtor's earnings.

Earnings arrestment is used to make a deduction from a debtor's earnings for enforcement of a single debt. A creditor must be in possession of a decree (or relevant document of debt) and must have issued the debtor with a Charge for Payment for Money, which must have expired, before proceeding with diligence against earnings. Where the debtor is an individual, the creditor, must also have provided a Debt Advice and Information Package.

Calculating deductions

The amount that can be deducted by way of earnings arrestment is calculated from deduction tables provided in updated regulations. Tables are provided for daily, weekly and monthly earnings.

The amount that will be deducted depends on the amount of earnings the debtor receives and the frequency of pay. The employer will not make a deduction if the debtor earns less than the lowest amount on the table. For current maintenance arrestment the amount deducted is calculated in accordance with section 53 of the Debtors (Scotland) Act 1987 and a minimum amount of daily earnings is protected from deduction.

Where there is an earnings arrestment and a current maintenance arrestment against the same debtor, and the debtor does not earn enough to meet both deductions, a formula is used to calculate how much should be deducted for each creditor. This formula is detailed in section 199 of the Bankruptcy and Diligence etc. (Scotland) Act 2007.

Conjoined arrestment order

A conjoined arrestment order is an order granted by the court to enforce payment of two or more of the same type of debts, at the same time. For example, an earnings arrestment and current maintenance arrestment may be in place at the same time, as they are different diligences, but two earnings arrestments must be joined together and treated as one arrestment.

Both earnings arrestment and current maintenance arrestment require the debtor's employer to deduct an amount from the debtor's net earnings (earnings after tax and national insurance), on each pay-day, and pass that deduction to the creditor. For conjoined arrestment orders, the debtor's employer is required to make a deduction and pass it to the court to distribute the funds.

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