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Creditors often use different tactics to enforce repayments from their debtors. Several people are unaware of these enforcement actions. Remember, the law gives this power to lenders to get their money back. Before borrowing money, it is essential to understand these tactics.
Wage Arrestment
Your creditors can get a CCJ (county court judgment) from the court. It means repayment becomes necessary either in full or in installments by a particular date. If you are unsuccessful in obeying the terms of a court order, creditors will use other actions to receive money. After CCJ, second step is wage arrestment. Feel free to click here to find complete details of wage arrestment.
An employed person can get this order for credit debts, student loans, mortgage or rent arrears and VAT or income tax arrears. Moreover, if you have child maintenance or council tax debts, creditors can apply for this order. As per this order, your boss will get an arrestment schedule. This schedule contains details of regular deductions from wages to repay your owed money.
You could get more than one earnings arrestment orders at a time. Remember, employers will send the money directly to the creditor and charge a fee every time. Debtors can get a copy of this schedule from his/her boss.
Bank Arrestment
Do you have money in an account (bank, credit union, or a building society account), you may get a bank arrest notice. Your creditors may get their money back from your benefits or wages. For this purpose, your creditors are not liable to send you a DAIP (Debt Advice & Information Package) or a charge for payment.
A creditor may ask a sheriff officer to send an arrestment order on your financial institute. The money in an account can be removed and frozen. You can’t withdraw this money or use it to make payments. The entire sum in your bank account will be frozen at the time of notice, even if your total wealth is more than your debt.
Remember, your creditor will not get this currency straight away. They need permission from the court to instruct a credit union, building society, or bank to release your money. After making all payments, the surplus funds will be issued for you. If you want to avoid fine or extra cost, permit your bank, credit union, or building a society to release money that you owe.
Arrestment on the Need
Sometimes, creditors are concerned that you could destroy or damage a specific item or funds you owe before a court decree. They may request the court for arrestment authority pending the decision of the court. Without a decree, you can’t take any action, such as transfer money or value of items to creditors.
After getting these warrants, you can’t access funds in a credit union, a building society, or a bank account. Moreover, you are unable to use goods in your warehouse. Even life insurance policies become invalid for you for a particular period. You will need a decree to use items and funds to repay your debt.
