Over two hundred thousand people across Scotland in the next 12 months will likely receive a £25 Court Fee applied to their bank accounts.

The fees are applied every time a Sheriff Officer serves a bank account arrestment on someone’s bank account, one of Scotland most harsh, but also most common form of debt recovery. In 2019, the number of bank arrestments served was 218,350: over 80% of which were for Council Tax debt, 18% for HMRC debts and 2% for other types of debts such as credit cards and bank loans; and although the number being executed fell during Covid, all the evidence suggests numbers now are quickly returning to pre-Covid levels as Scots face a cost of living crisis.

What is the £25 Court Order Fee for?

Bank Account Arrestments can be served for any type of debt, providing those owed the money have obtained a court order, or it’s equivalent, such as a Summary Warrant. They seize all funds held in someone’s bank account over what is known as a protected minimum balance of £529.90 (rising to £566.51 in April 2022).

However, when someone has less than the protected minimum balance in their bank account, although the bank account arrestment fails, bank routinely still apply a £25 Court Fee on people’s bank accounts, often forcing people into unarranged overdrafts: this means even those on benefits who often don’t have more than £529.90 in their accounts, still lose £25 in bank fees that they weren’t expecting.

What happens if you have more than the Protected Minimum Balance?

Where someone has more than the Protected Minimum Balance in their bank account, the arrestment effectively freezes all sums held in someone’s account (up to the full amount they owe), often resulting in families and households experiencing severe financial hardship, as all they are left with is the Protected Minimum Balance to live on for the next month. This can mean families being left with only £529.90 to spend on all their essential expenditure.  This can mean choosing between food, rent/mortgages, heating or travelling costs.

One of the biggest problems with Bank Account Arrestments is they don’t discriminate between the households they apply to: so, a single person household can be left with the same amount of money to live on as a household with two adults and three children.

The reality is rather than helping people reduce how much debt they owe, bank account arrestments can force people into even more debts as they miss payments to essential bills.

Why are bank account arrestments more common than wage arrestments?

The most disturbing thing about Bank Account Arrestments in Scotland, is that they are so widely used. Other types of debt recovery, which are designed to be more proportionate and not cause as much hardship, are significantly less used.

In 2019, for example, there was three times more Bank Account Arrestments as there were Wage Arrestments (71,730).

Wage arrestments are not as harsh as bank account arrestments, as although they also only protect the first £529.90 each month, only 19% of amounts over that amount are arrested (with higher percentages applying as net earnings increase). However, the reality is, if someone has £1,500 in net earnings and their wages are arrested, only £184.39 is taken, leaving the person with £1,315.61 to live on for the rest of the month. However, if Sheriff Officers wait until the money is paid into their bank account and arrest the bank account, they could seize £970.10 and leave the person or family with only £529.90.

Will you get any notice of a Bank Account Arrestment?

No, not usually, unlike a wage arrestment where you will normally be served with an Earning Arrestment Schedule before the Arrestment takes place.

This is not to say that the Scottish Parliament has never thought people should get any notice of a bank account arrestment. In 2007, for example, amendments to the Debtors (Scotland) Act 1987 were introduced to require creditors to serve Debt Advice and Information packs on people 48 hours after a bank arrestment was executed. This would tell them where they can get advice. Unfortunately, since 2007, the Scottish Government have refused to introduce this measure.

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