Menu Close

Attachment of Earnings — Why is it known as Order of Deduction?

Attachment of Earnings order is a type of order issued against you when you fail to clear the payments to the creditors. With the help of this order, the creditors get the right to deduct the desired amount from your salary or any form of wages. 

Let’s get to the details of the Attachment of earnings order employer’s guide, and you will also come to know how the court is making the decision and how the debtors are allowed to deduct the desirable amount of money from the earnings. Last but not the least, you will also get a brief knowledge of the employer’s duties. 

What is an attachment of earnings?

An attachment of earning order is where your employer is instructed to stop money from your wages to pay back your debt – in other words, the money will never hit your bank account.

Your employer will send the payments directly to the court and the court will then forward it onto your creditor.

Your employer will more than likely charge an administration fee of £1 on top of whatever the court instructs them to pay.

In order to determine how much you should pay back to your creditor, the court will work out the minimum amount of money you need to live on.

This is known as the protected earnings rate.

The money you owe to your creditor can only be taken out of your wages above this amount.

If your take home pay fluctuates and is less one month, the amount you pay your creditor would reflect this and you’d pay less to them, as your income cannot fall below what the court has set.

Your creditor is unable to obtain an attachment of earnings if:

  • the amount you owe is less than £50, or
  • your take-home pay always works out below the protected earnings rate.

If your creditor is successful in obtaining an attachment of earnings order, it will tell you both the amount of the weekly or monthly deductions that must be made by your employer to your creditor, and the protected earnings rate the court has set for you.

What are the Employer’s Duties?

An employer must have all the details of the employees. Moreover, the organisation must take into consideration the employee who has debts. Now, follow the important points that are given below: 

  • Understand different types of orders as per the court.
  • Making sure that the employee is making regular payments to the creditors.
  • Paying the employee in time to maintain his/her debt repayments. 
  • The earnings of the employee must stay protected from the other deductions apart from debts.
  • When any amount is being deducted, the employer must inform the employee about the deduction.

When a new employee joins a particular organisation, then the head authority of the organisation must investigate the matter. They must ensure that the new employee has any previous debts or not. This is a procedure that all the organizations of the United Kingdom follow according to the Attachment of Earnings Act 1971. 

What are the duties of the Employee?

Apart from the employer’s duty, there are some aspects that the employees must follow. An employee of a certain organisation must make the debt repayment in time. If he/she is making the payment in instalment, then it must not be skipped, not even once. 

Apart from the amount that is being deducted, the employee must provide enough evidence of his/her protection for the earnings. Overall, the information that you provide must be genuine with proper documentation. In this way, the Attachment of Earnings can be restricted to a limit. 

Have you got the Attachment of Earnings? 

When you have already received the Attachment of Earnings Order, you need to respond to that as quickly as possible. Here are some of the points that you need to take into consideration while responding, and they are:

  • When the letter arrives, it will contain the N56 form for helping you with the response. This document is also known as the statement of means.
  • Fill up and complete the form very carefully. After that, always revise to detect any kind of mistake.
  • Now, you have 8 days time to return the form. Don’t forget to attract a copy of your latest payslip. 
  • If you don’t reply, you might be in danger. The creditors can take legal steps against you, and you can be dragged to court for justification. 

If you think that the Attachment of Earnings Order is being sent to you illegally and you don’t owe any debts or paying the debts correctly, you can also appeal to the court regarding that. 

Attachment of Earnings Order on Council Tax

Regarding the matter of the Council Tax, you must take it into serious consideration. While paying back the arrears of the Council Tax, if you receive the Attachment of Earnings Order, then there must be only two reasons – One is the incomplete statement in the payback form, and the other is you haven’t informed about the fixed percentage of your salary. So, to prevent this matter, you have to proceed accurately.

What is the amount that you have to pay?

When the court issues the Attachment of Earnings Order, apart from the debt amount, you have to pay something extra. This extra amount of money can be considered as fine. The creditors will eventually take it from you along with the entire debt amount. Actually, the creditors spend this money to issue the Attachment of Earnings Order; thus you have to give it back to them. 

Can i Stop an Attachment of Earnings Order? 

The N56 form will play a crucial role in suspending the order. When you think that the Attachment of Earnings Order is not applicable for you, then fill the form, tick-mark in the suspension option. Including that, you have to provide some valid pieces of evidence regarding the cancellation.

Anyone can fall on hard times and find themselves in debt, and if you’ve had notice of impending attachment of earnings order you should know exactly what you’re dealing with.

After that, the court will investigate the evidence. On successful cancellation, no money from your wages or salary will be deducted. On the other hand, if you do not want to inform your organization about this matter, then the court will grant permission for that. It will also inform the creditors about this matter. 

The Effect on the Debt Solution 

The Attachment of the Earnings Order will pose a negative impact on not only your debt solution but also on your credit books. If you have a debt management plan, then the Insolvency Practitioner will deal with the matter. He/she will help you in cancelling the Attachment of Earnings Order. 

Individual Voluntary Arrangement is one of the best and infamous debt management schemes. If you are availing the IVA, the Creditors will not even bother to try out the Attachment of Earnings Order against you. The terms and conditions of the IVA clearly state that the creditors will never be able to bother you. 

In the case of Bankruptcy, you have to build up a communication with the Trustee. The Trustee is the accountant or the official receiver of the Bankruptcy administration. In doing so, they will be able to IVA help you in stopping the Attachment of Earnings Order. 

Regarding the DRO, also known as the Debt Relief Order, you need to check how many debts are there in the DRO. In such cases, you have to send a copy of the DRO to the creditors. If you do so, then there will be no effect as the Attachment of Earnings Order will not be issued against you. However, make sure that the overall debt is more than 20,000 pounds. 

PHP Code Snippets Powered By :
Call Now Button