How do you Challenge a Bank Arrestment?

Bank Arrestments in Scotland can legally be recalled or restricted (for more information about bank arrestments, please read first What are Bank Arrestments?).

The only people that can do this are:

  • The Sheriff Officers, on the instructions of the creditors who authorised them to arrest the account in the first place; and
  • A Sheriff Court Judge

To get the Sheriff Officer to lift the arrestment you need to negotiate with the creditor that instructed the Sheriff Officers to arrest the funds in the first place.

Negotiating with the Creditors that arrested your Bank Account

This won’t be easy, but if you can show you are experiencing hardship, they may release some of the funds, if not all; but will usually want some security, such as the name and address of your employer and a repayment plan. They will want your employer’s details so if you default on the repayment plan, they can do a wage arrestment.

Another negotiating tactic may be to state your intention that you intend to submit a Notice of Objection to the Court or apply for the arrestment to be recalled or restricted on the grounds it is unduly harsh.

If the creditors believe you will do this and are not confident they will win, they may agree to a recall or restrict the arrestment voluntarily.

Notice of Objection to the Court

Submitting a notice of objection to court is a formal legal process that is provided for by S73M of the Debtors (Scotland) Act 1987.

It is done by submitting a form to the Sheriff Clerk’s office in your local Sheriff Court.

As the action is raised under the Debtors (Scotland) Act 1987 there is no cost to this and the Sheriff Clerk should notify the creditors, your bank and any other relevant party.

However, it is always worth bearing in mind that if you are unsuccessful, the Sheriff can order you pay the other parties legal expenses in responding to your application.

The Sheriff Clerk will also set a hearing date when your application will be heard by the Sheriff.

You will need to be prepared to either represent yourself or have someone represent you. You can be represented by a solicitor (although there may be a cost to this unless you are entitled to legal aid) or a lay representative from your local money advice service or Citizen Advice Bureau.

What are the Grounds you can object on?

To submit a Notice of Objection, there are specifics grounds your objection must be based on. These are:

  • The warrant the arrestment was executed on was invalid;
  • The arrestment has been executed incompetently or irregularly; or
  • The funds attached are owed to a third party solely or in common with the debtor.

Notices of objection must be submitted within 4 weeks of the bank arrestment being executed.

The Warrant was invalid

This is unlikely to be a ground for objecting to an arrestment, as the warrant for the arrestment is unlikely to be invalid.

However, where it may be, is where the debt has been for Council Tax arrears or taxes owed to HMRC. As these creditors must serve a Charge for Payment before they execute a bank arrestment. Where they have not, the argument could be they had no warrant to arrest the bank account.

Another argument may be where the Charge for Payment was served, the 14 days has not expired before the bank arrestment was executed.

Another ground may be where the Summary Diligence procedure was used, if there has been any error by the creditor in extracting the warrant from the Books of Council and Session, such as you had not defaulted on your agreement, then it may be possible to argue that it was invalid.

The Arrestment was Incompetent or Irregularly Executed

The other grounds that could be argued is that an arrestment is incompetent or has been executed irregularly.

One argument in terms of incompetency, is that the funds that were attached, could not competently be attached. An example of this may be where the only funds held in the account were benefit income only.

Under section 187 of the Social Security Administration Act 1992, certain social security benefits are said to be inalienable, which means they cannot be attached. For those benefits that have now been devolved to the Scottish Parliament, the corresponding provisions would be section 83 of the Social Security (Scotland) Act 2018.

Sheriff Officers often argue this doesn’t apply anymore to bank arrestments as they argue that when the Minimum Protected Balance for bank arrestments came into force, these protections were superseded, however this argument is flawed.

First in terms of Scottish Social Security benefits, the protection was introduced after Minimum Protected Balances were for banks arrestments, so earlier legislation cannot have overwritten more recent legislation.

And in terms of the UK protections that were introduced in 1992, this area of law was not devolved to the Scottish Parliament at the time the Minimum Protected Balance was introduced, so it would not have been competent for the Scottish Parliament to have amended UK laws in this area.

This, however, is a complex area, so it is always best to take legal advice first or speak to a specialist money advice service.

The arguments about benefits are also only likely to succeed where the money in the bank account are purely benefits, as there is a strong argument that once funds are in-mixed with other funds (benefits, wages etc.), they lose their character as benefits and any protections that go with them.

However, that does not mean, an application could not be made on the grounds the arrestment was unduly harsh (see below) and the arrestment should be restricted.

Another example of where this ground may be used, however, is where an arrestment is executed by Sheriff Officers who serves it on the bank and the bank don’t act on it immediately, or there are no funds in someone’s account. However, when the bank does apply it, possibly a day or two later there are funds. This would be an irregular execution, as bank arrestments can only arrest funds in an account on the day they are served. If there are no funds, they fail, even if the next day funds are then deposited in the account.

Funds owed Solely to a Third Party or in Common with a Debtor

This situation is likely to arise where someone has a joint account with someone else and the funds are arrested, most commonly a husband or wife or civic partners, but not exclusively.

As a result, some times the joint account holder may lose their money because of the other person’s debt. It does not necessarily mean that it will be presumed 50% of the money belongs to the other person, but will very much depend on who has been contributing to the account and for what purpose and to what extent.

It may also depend, in the case where it is for a joint debt like council tax, whether the other account holder was also liable for that debt, even if the bank arrestment didn’t name they specifically. These are factors a Sheriff may take into consideration in deciding if all the fund arrested should be restricted or not.

It is also possible where it is not a joint account, this argument could still be used where someone else has been using the account. If for example, it can be shown that it was someone else’s wages or benefits that were getting paid into the account. A Sheriff, based on the facts of the case, may lift the arrestment.

How do you submit a Notice of Objection?

A Notice of Objection is submitted to the Sheriff Clerk’s office in your local Sheriff Court using a Form 63 F (this can be download here in word format or PDF format).

The relevant legislation under the Debtors (Scotland) Act 1987 can be found here.

On receipt of the application, the Sheriff Clerk shall schedule a hearing date and notify all the relevant parties to give them an opportunity to have their case heard by the Sheriff.

Other parties may be represented by a solicitor, so it is always best to ensure where you are making an application, that you are also represented by an in-court adviser from your local Citizen Advice Bureau, local advice service or by a solicitor (although, unless you are entitled to legal aid, there may be a cost associated with this).

You can represent yourself and you can also ask the court that you be supported by what is called a Lay Support person (who can be a friend or family member). Lay Supports cannot speak during the hearing but can provide you with moral support and you can consult with them during the hearing.

When you are attending a hearing and representing yourself, you will want to be as prepared as possible, have bank statements etc. and copies that can be given to the Sheriff and the other party’s solicitors (so always take three copies of everything).

The Scottish Court website has useful information about attending a court when you are not being represented by a solicitor and the Sheriff Clerk in your local court may be able to give you some advice about procedural matters, although they cannot advise you on your case.

For more information, see here.

Unduly Harsh

Another ground for challenging a bank arrestment is the bank arrestment was unduly harsh.

This grounds of challenge can be made at any point up until the funds are transferred to the creditor.

Many people understandably feel this way when their bank account is arrested, however, a difference must be made between a bank arrestment being harsh and unduly harsh.

Bank arrestments are what is known in Scotland as a form of diligence.

This is a term that is used to described procedures that can be used to legally enforce a debt. By the very nature of diligence, it is a coercive procedure and, therefore, harsh and Sheriff understand this. So arguing it was harsh is unlikely to succeed.

The bar for showing a bank arrestment was unduly harsh, therefore, is a high one and not an easy one to reach. This has more become the case since Minimum Protected Balances for bank arrestments were introduced, as you are no longer left with any funds, meaning showing the arrestment was unduly harsh is harder to do.

However, that is not to say the case cannot be made and, it is likely there are many situations where a bank arrestment could be argued to be unduly harsh, but few challenges are ever made.

Examples of situations where a bank arrestment may be deemed unduly harsh are:

Existing Earning Arrestment

Where the creditor is already arresting you wages and then also arrests your bank account, this could be argued to be unduly harsh. This is known as double diligence, as you may see the same wages having diligence executed against them twice for the same debt in the same month, a Sheriff may be persuaded this is unduly harsh.

However, double diligence is allowed, so you still have to show it was unduly harsh.

Existing obligations

You may also have the situation, where the minimum amount is left in your bank account, but on the same day, or shortly, thereafter, another payment is taken out for a direct debit or standing order, and you are left with no funds for food or heating, or other essentials. This may also be deemed unduly harsh.

Again you need to demonstrate you were left without essentials.

Benefit Income

Likewise, most of your income may be benefit income, which is supposed to be alimentary in nature, but is in an account where a small amount of earnings are also paid into it.

This may prevent you arguing the arrestment was incompetent, but a Sheriff based on the facts of your case, may believe that the arrestment is unduly harsh as it has denied you access to benefit income that legally parliament had intended to be protected from such diligences.

The number of possible scenarios that may arise are too numerous to anticipate in this blog, but the key point is the case must be made it is not just harsh, but some other factor has contributed to it being unduly harsh.

This could also be an illness or disability.

There are also some additional factors that should be focused on when making the application.

You will want to provide the court with an income and expenditure, showing all income coming into the house and all all your outgoings, so the court can see how much is required for essential living purposes and how much you have been left with.

You will also want to identify the source of the funds that were paid into the bank account. So was it benefits, wages, student loans etc? Or was it a payment of money for a specific purpose, such as from the Scottish Welfare Fund or backdated social security benefits.

You also don’t just want to focus on why it was unduly harsh for you, but why it was unduly harsh to other people, such as your children or partner.

How do you Object on the Grounds of Unduly Harsh?

An application to the court on the grounds a bank arrestment was unduly harsh is made using Form 63 G and is submitted to the Sheriff Clerk’s Office in your local Sheriff Court.

There is not a fee associated with filing the paperwork and the Sheriff Clerk should notify the relevant parties and schedule a hearing in front of the Sheriff where all parties can be heard. The form can be downloaded here in Word format or PDF format.

The relevant legislation under the Debtors (Scotland) Act 1987 can be found here.

Other parties may be represented by a solicitor, so it is always best to ensure where you are making an application, that you are also represented by an in-court adviser from your local Citizen Advice Bureau, local advice service or by a solicitor (although, unless you are entitled to legal aid, there may be a cost associated with this).

You can represent yourself and you can also ask the court that you be supported by what is called a Lay Support person (who can be a friend or family member). Lay Supports cannot speak during the hearing but can provide you with moral support and you can consult with them during the hearing.

When attending a hearing and are representing yourself, you will want to be as prepared as possible, have bank statements etc. and copies that can be given to the Sheriff and the other party’s solicitors (so always have three copies of everything).

The Scottish Court website has useful information about attending a court when you are not being represented by a solicitor and the Sheriff Clerk in your local court may be able to give you some advice about procedural matters, although they cannot advise you on your case.

For more information, see here.

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