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Debt and the Consequences: Important information to help you deal with your creditors and debt

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8. What types of enforcement action can a creditor use?

Following the decree from the court your creditor can take a number of actions, including putting a freeze on your bank account or arresting your wages. They may be able to take more than one action at the same time.

Arrestment of earnings

If you are working, your employer may receive an arrestment schedule from your creditor instructing them to make regular deductions from your wages to repay the debt owed. Your creditor must have sent you a charge for payment and the Debt Advice and Information Package before they issue the arrestment schedule. The deductions are taken off your wages every pay day in the same way that tax is deducted and continue until all the debt is paid.

You could have more than one creditor arrest your wages at the same time. There is a maximum amount, based on your earnings level, which can be deducted on each pay day. This amount will be shared amongst your creditors if you have more than one arrestment.

Your employer sends the money to your creditor(s) and can charge you a small fee every time a deduction is made from your wages or salary. Your employer will give you a copy of the earnings arrestment schedule. They will also tell you when the first deduction will be made and how much it will be.

Bank arrestment

If you have money in a bank, building society or a credit union account, this includes your wages or benefits, your creditor can arrest the money to repay what you owe. To do this your creditor does not normally have to give you a charge for payment or a Debt Advice and Information Package.

Your creditor will ask a sheriff officer to serve an arrestment on your bank. The money in your accounts at that time will be frozen and removed. You cannot withdraw that money or use it to make other payments such as standing orders or direct debit payments. All the money in your accounts is frozen at the time of service, even if it is more than the total amount which you owe.

Your creditor doesn't get the money straight away. They have to ask the court to instruct your bank, building society or credit union to release the money that you actually owe, plus any costs of the court action. Only then will any surplus funds be released for your use.

If you give permission to your bank, building society or credit union to release the amount that you owe, the matter can be dealt with more quickly and you can avoid paying the additional costs of further court action.

Other arrestments

Bank arrestment is not the only form of arrestment. Creditors can arrest items in the hands of a third party, for example, goods held in storage or within a warehouse. They can also arrest other things such as your rights under life assurance policies.

Arrestment on the dependence

If your creditor is concerned that you might dispose of, damage or destroy funds or certain items you own before a decree has been issued or while court action is ongoing, they can ask the court for authority for arrestment pending the court's decision. No action can be taken to transfer money or the value of other items to your creditor until a decree has been granted.

Arrestment on the dependence can prevent you accessing funds in your bank, building society or credit union accounts. It can also prevent you dealing with other items you own, for example, goods in a warehouse, and things like life assurance policies.

It is only after a decree is granted that the funds or items can be disposed of to pay your debt.

Eviction due to rent or mortgage arrears

If you have fallen behind with your rent or mortgage payments, or payments for a loan which is 'secured' on your home, your landlord or your lender can take action against you. They can take action even if you are bankrupt.

They can ask the court for an order for you and your family to be evicted or for your home to be repossessed. If the court agrees they will set a date by which you must leave the property. If you do not leave by that date, sheriff officers will come to your property to evict you.

If you are evicted, the sheriff officer will change the locks to prevent you from accessing your home. They will not, however, remove your possessions from the property and you must contact your landlord or lender to arrange to collect your possessions. If you do not make arrangements your possessions will be disposed of.

There are laws protecting tenants and homeowners. You should get advice from a money adviser, a housing aid centre or a solicitor if you think your creditor is taking action to evict you or repossess your home.

Attachment

Your creditor may instruct a sheriff officer to 'attach' items you own which are kept outside your home, for example, in your garage or driveway or in buildings used for business. Items kept in your home cannot normally be attached. Certain items are excluded from attachment, such as tools for your trade and cars valued at under £1,000 and mobile homes which are your main residence. Once attached, you cannot deal with these items. Items can be sold to pay your debts.

Your creditor must have sent you a charge for payment and the Debt Advice and Information Package before they take steps to attach items you own.

The sheriff officer will value the items and send a report of the attachment to the court. The items will then be removed by the sheriff officer and auctioned and the money will be sent to your creditor.

Only in exceptional circumstances can property which is inside a home be sold.

Interim attachment

If your creditor is concerned that you might dispose of, damage or destroy items you own before a decree has been issued, they can ask the court for an interim attachment order.

An interim attachment order prevents you from selling the items attached but allows you to continue to use them. The goods will be valued but not normally removed and no action can be taken to sell them until a decree is granted.

If the decree is granted the sheriff officer will revalue the items and send a report to the court. The items can then be removed by the sheriff officer and auctioned and the money will be sent to your creditor.

Inhibition

A creditor may ask the court for an inhibition against your home or other property, even if you own it jointly with someone else. This will stop you from selling or transferring ownership of the property or taking out any further loans against it. Inhibition does not allow your creditor to take possession of, or to sell, your property.

Your creditor will discharge or lift the inhibition if you pay them what is owed. The inhibition will lapse after 5 years unless your creditor renews it.

Exceptional attachment orders

In exceptional circumstances your creditor can apply to the court for an exceptional attachment order which allows the attachment of goods inside a home.

A hearing will be held and you can be represented, or can represent yourself, at court.

The sheriff will only grant an exceptional attachment order if they are satisfied that the creditor has tried other methods to recover what they are owed.

If granted, a sheriff officer will come into your home, value your possessions, and attach items apart from items you need for your day to day living, such as, clothes, furniture, televisions and children's toys.

The sheriff officer will normally remove any attached item from your home immediately. These items will be auctioned and monies sent to your creditor.