How to stop a wage arrestment

You can stop a wage arrestment (an earnings arrestment) in Scotland by paying the debt in full, by getting a time to pay order from the sheriff, by showing the arrestment is invalid, or through a formal debt solution: an approved Debt Arrangement Scheme programme, a protected trust deed or sequestration (bankruptcy). A moratorium on diligence does not stop an arrestment that is already running. Which route is open to you depends on the debt and your wider situation.

When does a wage arrestment end?

Under the Debtors (Scotland) Act 1987, an earnings arrestment stays in effect until:

• the debt it is recovering has been paid or otherwise extinguished
• you stop working for that employer
• it is recalled (cancelled) by the sheriff, or abandoned by the creditor
• it stops having effect for another legal reason, for example because a trust deed becomes protected or you are sequestrated

Leaving your job ends the arrestment with that employer, but it does not end the debt. The creditor can use diligence again, including arresting your wages with a new employer.

If you want to check how the arrestment works or whether the right amount is being taken, earnings arrestment (wage arrestment) explains the deduction tables.

Can you stop it by paying or agreeing with the creditor?

Paying in full

The arrestment ends once the debt it is recovering has been paid. Ask the creditor or the sheriff officers for a full settlement figure first, because the costs of enforcement can be added. Once you have paid, keep proof and check your next payslip.

Agreeing a payment arrangement

A creditor can abandon an arrestment, for example if you agree to pay in another way, but they do not have to. If you reach an agreement, ask for written confirmation that the arrestment is being abandoned and that your employer will be told.

Your employer is legally required to keep making deductions while the arrestment is in effect, so asking your employer to stop will not work on its own.

How does a time to pay order stop an arrestment?

A time to pay order is an order from the sheriff letting you pay a debt by instalments, or as a lump sum at a later date. You can apply once a charge for payment has been served or an arrestment made. When the sheriff makes a time to pay order, the law says they must recall any existing earnings arrestment for that debt (section 9 of the 1987 Act).

The main conditions are:

• No time to pay for this debt before. It does not matter whether the earlier direction or order is still in effect.
• The debt must be within the limit. The Act says £10,000 or a higher amount set by regulations. Regulations raised it to £25,000 from 10 July 2000, which matches the figure on mygov.scot.
• Some debts are excluded, including money owed to HMRC or Revenue Scotland, and maintenance.
• The sheriff must think it reasonable, looking at the reasons for the debt, your finances, your offer and any objection from the creditor.

While a time to pay order is in effect, the creditor cannot start a new arrestment for that debt. If your arrears reach two instalments, the order stops having effect, the creditor can enforce again, and you cannot get time to pay for that debt a second time. Asking the court for time to pay explains how to apply.

Can you challenge the arrestment?

An earnings arrestment only comes into effect if the rules were followed. In particular:

• a charge for payment must have been served on you and the time to pay it must have run out
• the creditor must have given you a Debt Advice and Information Package, a booklet from the Accountant in Bankruptcy (AiB), no earlier than 12 weeks before the arrestment schedule was served on your employer

If you apply and the sheriff is satisfied an arrestment is invalid or has stopped having effect, the sheriff must make an order saying so. You can also ask the sheriff to settle a dispute about how the arrestment is being operated, for example if too much is being taken, and the sheriff can order money to be paid back. Get specialist advice before applying, because you will need to show what went wrong.

Does a moratorium stop a wage arrestment?

No, not one that is already running. A moratorium on diligence gives you 6 months in which creditors cannot serve a charge for payment, start new diligence or petition for your sequestration. But the Bankruptcy (Scotland) Act 2016 says an earnings arrestment, current maintenance arrestment or conjoined arrestment order that came into effect before the moratorium began can carry on.

A moratorium can still help. It stops other creditors starting new enforcement while you get advice and apply for a debt solution. It does not freeze interest, it appears on the public Register of Insolvencies, and you can only have one in any 12 months.

Which debt solutions end a wage arrestment?

Debt Arrangement Scheme (DAS)

The DAS regulations say that when a debt payment programme is approved, approval has the effect of recalling any arrestment of your income or property, and AiB sends notice of the recall to your employer. After that, creditors cannot start or carry out diligence for the debts in the programme. AiB guidance adds that if you have a conjoined arrestment order, the court clerk is told, which in effect recalls it. You can only apply through a DAS approved money adviser, who cannot charge you for setting it up. See the Debt Arrangement Scheme.

Protected trust deed

On the date a trust deed becomes protected, any current earnings arrestment, current maintenance arrestment or conjoined arrestment order stops having effect, and a creditor who can claim in the trust deed cannot start a new one. A trust deed has fees, affects your credit rating for 6 years and puts your name on the public Register of Insolvencies. Homeowners may need to release equity, not all debts can be included, and if it fails, creditors can pursue you again and the trustee can petition for your sequestration. See how a trust deed becomes protected.

Sequestration (bankruptcy)

An existing earnings arrestment, current maintenance arrestment or conjoined arrestment order stops having effect on the date of sequestration, and creditors who can claim in the sequestration cannot start a new one. Sequestration has serious consequences, including restrictions while you are bankrupt and possible contributions from your income. The Minimal Asset Process is a simpler bankruptcy route for people with a low income and few assets.

Informal plans

A debt management plan is not legally binding, so on its own it does not end an arrestment, although a creditor may agree to abandon one as part of a plan.

None of these options suits everyone. An adviser needs to look at your income, household costs, assets and all your debts before you choose.

What should you do now?

• Find the paperwork. Which creditor is it, what is the debt, and when was the arrestment schedule served on your employer?
• Check whether you have had time to pay for this debt before. If not, a time to pay order may be open to you.
• Check the procedure. Were you served a charge for payment, and did you get a Debt Advice and Information Package?
• Check your payslip against the deduction tables.
• Look at your other debts. If there is more than one creditor, time to pay for one debt may not be enough.
• Keep paying priority bills such as rent, mortgage and council tax.

Official sources

• Debtors (Scotland) Act 1987, including sections 5 and 9 (time to pay orders), 47 and 50 (earnings arrestments) and 72 (effect of sequestration)
• Debtors (Scotland) Act 1987 (Amendment) Regulations 2000 (the £25,000 time to pay limit)
• Debt Arrangement Scheme (Scotland) Regulations 2011, regulation 33 (effect of approval)
• Bankruptcy (Scotland) Act 2016, including section 173 (protected trust deeds) and section 197 (moratorium)
• mygov.scot: asking the court for time to pay a debt