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Dealing with Debt: Finding your feet: Advice for you if you are in debt

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6a When can money be taken from my wages, salary or bank account?

Earnings arrestment

If you are working, the money you owe can be taken from your wages or your salary by an earnings arrestment. But before this can happen your creditor will have taken you to court and got a court decree.

In most cases you will have been sent a charge for payment (a warning that unless you pay what you owe within 14 days they are going to take action). After the 14 days, they can then use an earnings arrestment.

How does an earnings arrestment work?

Your creditor will send the earnings arrestment to your employer. Your employer must then make deductions from your wages or salary. The deductions are made every pay day in the same way that tax is taken off your wages or salary. Your employer sends the money to the creditor who served the earnings arrestment and can charge you £1 to do this.

You will usually get a copy of the earnings arrestment schedule. If not, you may ask your employer for a copy.

How much money can be taken out of my wages or salary?

There is a limit on how much money can be taken from your wages or salary. That limit depends on how much you earn and whether you are paid weekly or monthly or in some other way. The limit is fixed by law and your employer should have a note of how much may be taken from your wages or salary.

Remember that you can get help and advice, especially if you think the amount that is being taken from your earnings is wrong.

Bank arrestment

If you have money in a bank or building society account or with a credit union, the money you owe can be taken from your bank, building society or credit union account.

Your creditor sends the arrestment to your bank, building society or credit union. When the arrestment is served, the money, which you have in your account, is frozen and you cannot withdraw that money or use it to make other payments such as standing order or direct debit payments. All the money in your account is frozen, even if it is more than the total amount which you owe.

Your creditor doesn't get the money that has been frozen right away. They have to go to court to force your bank or building society or credit union to release the money. The court will order your bank or building society or credit union to pay the amount that you actually owe. The court may also order you to pay the costs of doing this court action.

If you want to avoid paying the costs of this court action you can give permission to your bank or building society or credit union to release the amount that you owe.

Do you know?

  • Your creditor can use an earnings arrestment and a bank arrestment at the same time. This could cause you severe difficulty and you can apply to the court for time to pay your debt.

A money adviser can help to explain how wages and bank arrestments work and can help to make sure that only the amount which should be deducted is taken by your creditor - Go here for helpline details.

Child support

If you do not pay child support payments which you have been ordered by a court to pay or which the Child Support Agency has asked you to pay then deductions can be made from your wages or salary to meet these payments.

Do you know?

  • A creditor can use more than one method to try to get their money back.
  • A creditor can't usually take action against you unless they have first taken you to court.
  • Your employer can charge you a fee of £1 every time a deduction has to be made under an earnings arrestment.