What is an Attachment of Earning Order?
When you fall behind on certain types of debt, creditors may pursue an Attachment of Earnings Order (AEO) through the courts. This legal mechanism enables them to recover what they’re owed directly from your salary or wages. While similar to Direct Earnings Attachments used for benefit overpayments, AEOs are specifically designed for debts like unpaid court fines, council tax arrears, and child maintenance payments.
How does an Attachment of Earnings Order work?
Once a creditor successfully obtains an AEO through the courts, they’ll establish a direct line with your employer’s payroll department. Your employer becomes legally obligated to withhold a specific percentage of your earnings before you receive your pay. These deductions are then forwarded to either the court or directly to the creditor to clear your outstanding debt. The process continues until you’ve settled the full amount owed.
What earnings can be taken as part of an Attachment of Earnings Order?
An AEO can be applied to various forms of income, including your basic salary, commission payments, performance bonuses, overtime earnings, and statutory sick pay. However, the law protects certain types of income from AEOs. These protected payments include statutory maternity pay, pension payments below the guaranteed minimum level, and specific disability-related benefits.
How much of my earnings can be taken under an Attachment of Earnings Order?
AEO deductions follow a progressive structure based on your weekly earnings. The system uses protected earnings levels, meaning if you earn below a certain threshold, no deductions are permitted. Above this level, deduction rates increase gradually with higher earnings, typically ranging from 1% to 12% of your income.
Currently, this is structure as follows:
- Weekly earnings below £380: Protected earnings – no deductions permitted
- £380-£520: Maximum 1% deduction
- £520-£720: Maximum 3% deduction
- £720-£900: Maximum 5% deduction
- £900-£1,440: Maximum 7% deduction
- Over £1,440: Maximum 12% deduction
Remember that these thresholds are regularly reviewed and may be adjusted based on changes in living costs and economic conditions.
Does my employer need to be informed of an Attachment of Earnings Order?
Yes. When an AEO is granted, your employer will receive official documentation from the court outlining their legal obligations. They’ll be provided with detailed instructions about implementing the deductions, including calculation methods and payment procedures. Your employer must comply with these instructions to avoid legal consequences.
Can multiple Attachment of Earnings Orders be applied to my warnings?
Yes. More than one AEOs can be active at any one time, but there are safeguards in place to prevent excessive deductions. The combined total of all AEO deductions must remain within the legal maximum limits. Courts typically coordinate when multiple orders exist to ensure the deductions remain manageable for the debtor.
Will my credit score be negatively impacted by an Attachment of Earnings Order?
While the AEO itself won’t appear on your credit file, the underlying County Court Judgment (CCJ) that led to the AEO will be recorded. This CCJ remains visible to potential lenders for six years from the judgment date, damaging your credit score and potentially affecting your ability to secure future credit. However, once the six-year period expires, the CCJ is automatically removed from your credit history.
Can I be exempt from an Attachment of Earnings Order?
Courts may grant exemptions from AEOs in specific situations. If you’re actively managing your debts through a formal debt management plan, for example, the court might determine an AEO unnecessary. Financial hardship, caring responsibilities, or having dependents may also influence the court’s decision. Each case is evaluated individually, considering the debtor’s complete financial circumstances.
For this reason, it’s essential to seek advice from a professional debt management provider if you can’t service your debts. Here at MoneyPlus, for example, we can provide bespoke advice and support designed to help you manage your debts before an AEO occurs.
How can I avoid an Attachment of Earnings Order?
Taking proactive steps before an AEO becomes necessary is crucial. The most important thing to do is to always maintain open communication with creditors if you’re struggling with payments, and consider seeking professional debt advice early. At MoneyPlus, we can provide you with advice. Similarly, you can get free debt advice at MoneyHelper.
If you do receive a court summons, it’s vital you attend the hearing – your presence allows you to explain your situation and potentially negotiate alternative arrangements. Courts often prefer mutually agreed solutions over imposed orders.
What are my options if I have an Attachment of Earnings Order in place?
With an active AEO, you have several options for managing your situation. Firstly, it’s essential you keep up with your repayments and make sure the right amount is being taken from your earnings each month. This is your responsibility. If you don’t do this, you could be subject to more legal action, which could include a charging order on your property or repossession.
If you do find yourself struggling to service your repayments, speak to a debt management expert, such as MoneyPlus, as soon as possible. We can help you to negotiate with your creditors to achieve more affordable repayment plans. We can also help you find the most appropriate debt management solution for your situation. This could involve an individual voluntary arrangement (IVA), a debt management plan, or bankruptcy.
Get in touch to find out more.
