How do you stop a Earnings Arrestment?

Earning Arrestments can be both prevented and lifted using formal legal remedies that are available in Scotland.

Statutory Moratorium

The first way to stop an earning arrestment is to stop it occurring in the first place.  This is possible using what is known as the Statutory Moratorium procedure. This is a free process and does not involve the courts.  Instead, it involves registering a moratorium on the Register of Insolvencies, which is administered by the Accountant in Bankruptcy, a Scottish Government Agency.

Statutory moratoriums provide you with six weeks protection from a creditor executing any diligence, such as a wage arrestment. However, you can only use a Statutory Moratorium once every 12 months, so it is important to do so with caution, and only after you have sought advice. The idea behind it is during those six weeks, you should take steps to protect yourself, so you have a long term solution in place at the end of the six weeks.

A Statutory Moratorium, however, will not help if an earning arrestment is already in place, as it will not lift it.

Time to Pay Orders

Time to Pay Orders can also be used to  lift an earning arrestment. You can only apply for one, however, if you have not previously applied for one for the same debt.

Time to Pay Orders are applied for via the Sheriff Court and do not cost anything, although you may be liable for fees if you use a solicitor the creditor is represented in court by one and you are not successful.  You can find out more about Time to Pay Orders here.

Debt Arrangement Scheme

A Debt Payment Programme under the Debt Arrangement Scheme can also lift an earning arrestment, but only once it has been approved. On approval the arrestment is lifted as the debt is re-paid through the Programme. However, you cannot apply for a Debt Payment Programme if you have more than one wage arrestment (a conjoined arrestment), unless an additional creditor decides to take further action.

More information on the Debt Arrangement Scheme can be found here.

Protected Trust Deed

A Trust Deed lifts an Earning Arrestment once it becomes protected. A Trust Deed is protected five weeks after the creditors are notified by the Trustee that one has been granted and providing enough creditors don’t object to it. The Accountant in Bankruptcy also have to agree to register it.

As Trust Deeds include all debts accrued prior to them being granted, the creditors are able to make a claim in the Trust Deed.

More information on Protected Trust Deeds can be found here.

Sequestration (Bankruptcy)

The final method that can be used to lift an Earning Arrestment is an award of bankruptcy, otherwise known as Sequestration in Scotland.

Once the sequestration is awarded by the Accountant in Bankruptcy, or by the Court (where a creditor makes you bankrupt), the Trustee notifies the creditor and the wage arrestment should cease. Like with Protected Trust Deeds, the creditor should then make a claim in the bankruptcy.

More information on bankruptcy can be found here.

Return to the Earning Arrestment Homepage.