Protecting Your Income

There are two ways that your creditors can get hold of your income before you do.

1. Garnishee Order

If a court finds in favour of your creditor (which they will if you owe them money), then they give you opportunities to come up with a repayment scheme. However, if you fail to attend court or reply to any of the correspondence they issue, the court may impose a Garnishee Order. This is a court order that tells a garnishee (a bank) that your funds should not be released until directed by the court. The order may also tell your bank (or employer) to pay a given sum to your creditor from these funds. In effect, your employer may be forced to pay your salary directly to a creditor instead.

2. Attachment of Earnings Order

If a creditor has a judgment against you in the County Court, which you do not pay, then they can try to enforce the judgment against you with an Attachment of Earnings (AOE) Order. This order instructs your employer to make deductions straight from your earnings to clear your debt. Your employer then sends the money to the court.

The court can order deductions to be made directly from your earnings if you fulfil all of the following criteria:

• You owe more than £50 on the judgment.
• You are an employee (not self-employed or on benefits).
• You are behind with payments on your County Court Judgment (CCJ).

If an attachment of earnings has been issued against you, you will receive a letter from the court and an attachment of earnings form to fill in requesting your employment details and income and expenditure. The court will ask you to pay the amount owed in full, if you cannot afford this, you will need to fill in the form and send it back to the court.

You can ask the court to suspend the order if you don't want your employer contacted. If the court agrees you will be ordered to pay the creditor direct. If you fail to make these payments, the creditor will ask for a re-issue of the AOE and the order will be sent direct to your employer.

However, it is unlikely that any action will ever get that far. If you attend a court with a Financial Statement, you should be able to persuade a magistrate that you are taking the debt seriously and making an attempt to resolve the problem.

Protected Earnings Level

If you are attending court, take this opportunity to ask for your 'protected earnings level' to be set. This is the amount of money you must have every month to pay for the essential items shown on your Financial Statement. The court will take into consideration any repayments you have already agreed out of court with other creditors before setting this level.