Attachment of earnings
After the EJO has examined your situation, if you’re employed they may decide to enforce your judgment through an attachment of earnings order (AEO).
The EJO informs your employer to deduct the instalments to repay the debt directly from your wages. Your employer has to cooperate as the EJO, and if they don’t, they may face a fine.
When an AEO is enforced, your individual circumstances are considered. To prevent you from experiencing any hardship, the EJO will set a ‘
protected earnings rate’.
The rate will depend on your household composition and how much your essential bills are. If your wages ever fall under this amount the AEO won’t be taken. You can expect the EJO to take around 50% of any money you have left above the protected earnings rate.
An AEO can’t be made against you if you don’t have a pay-as-you-earn (PAYE) income, you’re a serving member of the armed forces or a merchant seaman.
If an attachment of earnings order isn’t possible, for example if you’re self-employed or a member of the armed forces, then the EJO may choose to enforce your judgment through an instalment order.
You’ll be notified in writing by the EJO about how much you have to pay. The amount is based on your examination of means, and you’ll be set a protected earnings rate.
The rate will ensure you and your family have enough money every month for all your essential household and living costs. Each month you’ll pay the creditor and not the EJO. If you miss a payment, your creditor will inform the EJO, and they may apply for committal proceedings against you.
If this happens you’ll be summoned to attend a committal hearing before the EJO Master, a judge of the High Court, where you’ll need to explain why you missed the payment.
The court can either set another order or adjourn the hearing.
In some cases, if the court thinks you had the means to pay a debt but failed to do so, they may send you to prison for up to six weeks.
Order charging land
An order charging land places a charge over your property, essentially changing the debt from unsecured to secured.
The order doesn’t give your creditor the right to force you to sell your property. But, if you decide to sell your property while the order is in place, some of the money from the sale will be given to the creditor to repay what you owe, before any is given to you. Usually, an order charging land will be made with another method of enforcement, such as an attachment of earnings order.
You’ll be sent a ‘notice of intention to make a charge’ by the EJO, as will anyone else with an interest in the property, such as your partner. Once you receive the notice, you’ll have eight days to object in writing. If there’s no objection, or your objection is dismissed, the order will be made and registered by your creditor with the Land Registry or Registry of Deeds.
We strongly recommend you seek expert legal advice before applying to object an order charging land.
Once this happens, the order will be in place for 12 years. An order charging land is the only enforcement power that includes interest charges, set at 8%, which you’ll start paying from the date the order is registered until the debt is paid in full.
If you complete the repayments in less than 12 years you can apply for a certificate of satisfaction, which you’ll need to give to the Land Registry or Registry of Deeds to have the order charging land removed.
If you’re unable to repay the debt and interest in full during this time, after 12 years it won’t be secured against your property anymore.
A seizure order tells the chief enforcement officer at the EJO to seize your goods and sell them to pay the debt and any enforcement costs.
Only items that solely belong to you can be seized. There are also items that can’t be seized under the order, such as:
- Goods you’re paying through a hire purchase or conditional sale agreement
- Perishable goods, such as food
- Tools of the trade up to a value of £200
- Clothing and essential household furniture
Seizure orders are rarely used by the EJO for personal debts. However, if you don’t cooperate with the EJO, or your ‘material wealth’ doesn’t match the information gathered during the examination of means they may use this power. Once you’re notified that the order is being made, you’ll have eight days to object to it.
We strongly recommend seeking expert legal advice before submitting your application if you’re planning to object to a seizure order.
The EJO will take your goods and place them in storage. To have your goods returned, you’ll need to come to a payment arrangement. However, your goods still won’t be released until you’ve paid the debt in full as well as any costs associated with seizing and storing the goods.
If you can’t come to a payment arrangement then your goods will be sold at auction to repay the debt and cover the EJO’s costs. Usually, your goods will be taken and sold within 60 days, so it’s important you act as soon as you’re told about the seizure order.
Order appointing receiver
During the examination of means, the EJO not only investigates your current situation but also whether you’re about to receive any money from third parties. This could be:
- a compensation payment
- the sale of a property, or
- an inheritance.
If this is the case, the EJO can enforce an order appointing a receiver, meaning the third party must pay the money directly to the EJO. Unlike other enforcement powers, the order appointing receiver is not made on notice, so you won’t have a chance to object before the order is made.
However, once you’re informed about the order, you can object in writing to the EJO Master. They’ll arrange a hearing which you must attend if you want to apply to have the order set aside. The application costs £177 and, depending on your situation, you may be entitled to help with the fee or have it waived entirely.
We suggest you seek expert legal advice to help with your application, and if needed, to attend the hearing with you.
A garnishee order gives the EJO the power to freeze your bank account and give any available funds to your creditor, as long as the account is in your sole name and is in credit.
The EJO serve your bank with the order, and the bank then freezes your account.
While the order is in force, the freeze stops any money from being paid in or withdrawn from the account, including any wages, benefits or bills. The EJO Master will set a hearing, usually two weeks after the order is made, where they’ll decide whether to return the funds to you or pay your creditor.
If you’re planning on objecting to a garnishee order we strongly recommend you seek legal advice to help you prepare for the hearing.
If you receive a garnishee order, it’s important that you act quickly as any bills due to be paid either by Direct Debit or standing order won’t be processed. You’ll need to contact your service providers and make alternative payment arrangements, to make sure you don’t fall behind on any priority household bills.
You’ll also need to do the same for anyone attempting to pay funds into your account, such as your employer, and arrange to have the money paid into a different account or by another method.
If it’s vital you have access to the funds before the hearing, for example, to pay essential bills or buy food, you should contact the EJO as soon as possible. They’ll schedule an emergency hearing and may release the money back to you.
Certificate of unenforceability
As well as the power to enforce a judgment, the EJO also has the power to decide when a judgment shouldn’t be enforced. For example, if after investigating your individual circumstances the EJO is satisfied you can’t repay your debts within a reasonable period they may issue a certificate of unenforceability. Usually, this will be granted if you’re on a low income and you don’t have any assets.
The certificate doesn’t write off the debt, but it does mean that no further enforcement action will be taken in relation to it. The EJO will add the certificate to their debt register, which will affect your credit rating and ability to take out further credit.
The EJO won’t accept any more applications for enforcement against you unless your circumstances change and your creditor applies to have the certificate set aside. They have 12 years from it being issued to do this. However, in practice, it’s rare this happens.