What is an Attachment of Earnings Order?
July 25, 2019
If a County Court Judgment (CCJ) is issued against you and you fail to make one or more payments, under certain circumstances your creditor can seek an order from the court to take money directly from your wages in payment of the debt.
This type of court order is known as an Attachment of Earnings Order (AEO). They’re only entitled to take this enforcement action if you owe more than £50, are employed, and your earnings are above a certain level, however.
How an Attachment of Earnings Order works
The court decides how much money you need for essential living expenses each week or month – this is known as the ‘protected earnings rate’ – and then they determine how much money above this amount should be paid to your creditor in repayment of the debt. This is a percentage of your take home pay.
If your net pay is below the protected earnings rate your creditor will be unable to use an AEO to recover their money. Furthermore, if your earnings vary week to week or month to month, your earnings rate remains protected so you’ll pay less money to your creditor at the times when your income drops.
You’ll need to provide the court with your employment and financial details including income and expenditure. Once the court has determined the level of repayments to be made your employer will be contacted, and they’ll need to deduct the amount stated from your wages each week or month.
If you have more than one County Court Judgment against you
If more than one CCJ has been issued against you, or you already have an AEO in place, you can request that a Consolidated Attachment of Earnings Order is put in place. This consolidates your debt repayments into a single instalment that is sent to the court, and then onto individual creditors in the prescribed amounts.
You need to let the court know that you’d like to consolidate repayments in this way, including how much you can repay in total, and the details of your income and expenditure to support your proposed repayment amount.
How does an Attachment of Earnings Order affect your employment?
Depending where you work, the existence of an AEO may provide grounds for dismissal or other forms of disciplinary action, but this certainly isn’t the case for all types of employment.
If you lose your job the Attachment of Earnings Order ceases, but it’s not cancelled, and comes back into effect if you secure new employment. Should you change your job you must let the court know as they will need to contact your new employer to implement the court order again.
If you’re worried that an Attachment of Earnings Order will be granted against you, please contact our expert team at UK Debt. We specialise in helping people escape debt, provide independent professional advice, and offer free same-day meetings to quickly establish your best options.
Banks and other financial institutions have an automatic right to offset the credit balances held in their customers’ bank accounts […]
Joint and several liability is a term used in relation to personal debt when the borrowing is in joint names. […]
A personal guarantee is a formal written assurance that makes the guarantor personally liable for a debt if a default […]