How to Tackle an Attachment of Earnings Order?

Life’s a roller coaster ride. Every now and then, it throws up different, challenging and often unannounced circumstances, completely out of the blue and out of our control. So, if you find yourself in debt, you may fall for hard times while struggling to keep on top of your contractual debt repayments and household bills. You need to tackle them head on. You cannot afford any mistake. So, first and foremost, you should know what exactly you are dealing with and which debt management plan will work for you at best.

Individual Voluntary Agreement (IVA) is one of the most suitable solutions for easy clearance of your unsecured, unaffordable debts. It may take 5-6 years, but after a year you will be discharged from bankruptcy. Moreover, it all depends on your monthly income and expense, and a licensed Insolvency Practitioner (IP) will deal with your creditors on your behalf.

Missing an instalment under an IVA program gives your creditors the right to take court action against you. If they get a County Court Judgment (CCJ) against you or any other court order, you will receive a notice impending Attachment of Earnings Order (AEO). Here, you must know what exactly it is and how you can deal with it. You cannot simply bury your head because you have to meet the court order requirements.

If you fail to follow the court order, your creditor who filed the petition can take further legal action to retrieve the money you owe, or you may face bankruptcy.

You must pay back the owned money either in full or in installment by an agreed period.

Remember, the creditor can obtain an attachment of earnings order that allows him to take money directly from your wages if you fail to make agreed repayments on unsecured debt under Individual Voluntary Agreement.

Ways to go about if your creditor apply for AEO

The fact of the matter is creditors usually inform the debtor that they are going to apply for AEO. Don’t ignore and contact them straight away and you may stop them from doing so if agreed on some other payment plan.

Bear in mind, you cannot stop a creditor from applying for the order if you have other debts unless you come to an agreeable debt settlement plan with him.

If your creditor successfully obtains the court order, you will receive a court form N56. You need to fill in the form with all the information about your financial circumstances, any other outstanding debt and your employer’s details. You also have to give your partner’s financial details if applicable.   

You have to submit this form with all the information required back to the court within a week – don’t ignore it if you don’t want to face any enforcement action.

Using this information, a court office will proceed to make an attachment of earnings order.

Remember, if you do not provide complete details or fail to return the form to court you will be sent a notice to appear before the judge.

If you need help filling this form or just want to seek a debt advice UK, you can contact an experienced debt management advisor from IVA Experts UK.

To get rid of this potential hassle from your creditor, you must know when he can apply for an attachment of earnings and it will help you take appropriate measures to sort this.

For any of the following debts, your creditor can apply for AEO.

• Credit Card Debt
• Student Loans
• Bank Loans
• Hire Purchase Agreements
• Income Tax Arrears
• Rent or Mortgage Arrears
• VAT or TV License Arrears

AEO application rules may vary if you have racked up child maintenance debts or council tax, but the creditor can apply for it to take money from your wages.

Your creditor cannot apply for AEO if you owe them less than £50 or if you are:

• Unemployed
• Self-Employed
• Armed Forces Personnel
• In Merchant Navy

Once obtained by the creditor, you may not be able to stop court proceedings from implementing its issued order.

So, you have to stop it beforehand. Here’s the available options;

Request Court to Suspend AEO:

You can ask the court to suspend the AEO by selecting the available option on N56 and providing your reasons for this request. Well, before that it’s highly recommended to contact your creditor for a new payment plan for you to get the owed money back and if he comes into new debt management plan you will be in a better position to get rid of AEO.

However, the court will grant you a conditional suspension. It means creditor will not be allowed to take any amount from your wages unless you fail to pay him the agreed amount as per new contract.

Ask Court for Consolidation AEO:

You can request the court, in writing, for a consolidation of attachment of earnings order. You can opt for this solution only if you have other CCJs and you can easily make one payment to manage financially.  

If the court agrees on it, you don’t need to repay different creditors yourself instead your employer will take one agreed amount out of your wages and send it to court monthly. Now, it’s the court’s responsibility to split up the received money and send it to all your creditors who have CCJs against you. 

If nothing is working out, get expert debt help UK from certified insolvency practitioners, such as ours at IVA Experts UK to prevent the creditor from applying for AEO or change the terms of the order, or how a repayment contract can be revised to save you from the trouble.

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