What is an Attachment of Earning Order?
An Attachment of Earning Order (AEO) is a legal process that allows creditors to recover unpaid debts from your earnings. Unlike Direct Earnings Attachments (DEAs), which are used to recover benefit overpayments, AEOs can be applied debts such as court fines, council tax, and child maintenance payments.
How does an Attachment of Earnings Order work?
If a creditor has obtained a court order for an AEO, your employer will be required to deduct a portion of your earnings and send it to the court or creditor until the debt is paid off. The amount that can be deducted will depend on how much you earn and your personal circumstances, but there are limits to how much can be taken.
What earnings can be taken as part of an Attachment of Earnings Order?
The earnings that can be taken as part of an AEO include wages, salary, bonuses, overtime pay, and statutory sick pay. However, certain payments such as statutory maternity pay and guaranteed minimum pension cannot be included.
How much of my earnings can be taken under an Attachment of Earnings Order?
The limits for how much can be taken are based on a sliding scale and take into account your income, tax, and National Insurance contributions.
The following limits apply:
- If you earn less than £380 per week, no more than 0% of your earnings can be taken.
- £380 and £520 per week, no more than 1% of your earnings can be taken.
- £520 and £720 per week, no more than 3% of your earnings can be taken.
- £720 and £900 per week, no more than 5% of your earnings can be taken.
- £900 and £1,440 per week, no more than 7% of your earnings can be taken.
- 1,440 per week, no more than 12% of your earnings can be taken.
It’s important to note that these figures are subject to change and may vary depending on your individual circumstances.
Does my employer need to be informed of an Attachment of Earnings Order?
Yes, your employer will be notified if an AEO is applied to your wages and will be responsible for deducting the appropriate amount from your earnings and sending it to the creditor or court.
Can multiple Attachment of Earnings Orders be applied to my warnings?
Yes, multiple AEOs can be applied to your earnings. However, the total amount that can be deducted from your earnings cannot exceed the maximum limit set by law.
Will my credit score be negatively impacted by an Attachment of Earnings Order?
An AEO does not appear on your credit report and will not directly affect your credit score. However, the initial County Court Judgement (CCJ) filed to enact the AEO will be recorded, and this will likely appear on your credit report. This may make it more difficult for you to obtain credit in the future, as it indicates that you have had difficulty managing your debts. This will be removed from your credit report within six years of first being ordered.
Can I be exempt from an Attachment of Earnings Order?
There are certain circumstances where you may be exempt from an AEO. For example, if you are already making repayments through a debt management plan, the court may decide that it is not necessary to apply an AEO.
Additionally, if you are on a low income or have dependents to support, the court may reduce the amount that can be deducted from your earnings.
It’s important to seek advice from a regulated debt advice provider if you are struggling to repay your debts. They can provide you with tailored advice and support to help you manage your debts and potentially avoid the need for an AEO.
MoneyPlus are one of the UK’s most trusted FCA regulated and recognised debt advice providers, if you feel you need help with your debts, head over to our site to see if we can help you.
How can I avoid an Attachment of Earnings Order?
The best way to avoid an AEO is to try to repay your debts in full and on time. However, if you are struggling to make repayments, you can speak to a debt advice professional for help to negotiate repayments with your creditors and create a plan to manage your debts.
If you have received a court summons for a debt, it’s important to attend the hearing and present your case to the judge. The judge may be able to offer alternative solutions to an AEO, such as a repayment plan or a debt relief order.
In some cases, it may be possible to challenge an AEO if you believe that it has been applied incorrectly or unfairly. However, this can be a complex and time-consuming process, and it’s important to seek legal advice before pursuing this option.
What are my options if I have an Attachment of Earnings Order in place?
If you have an AEO in place, it’s important to keep up with the repayments and ensure that the correct amount is being deducted from your earnings each month. Failure to do so can result in further legal action, such as a bailiff visit or a charging order on your property.
If you are struggling to make the repayments, it’s important to seek advice from a debt management professional. They can help you negotiate a more affordable repayment plan with your creditors or offer alternative debt solutions, such as an individual voluntary arrangement (IVA) or bankruptcy.