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Debt Advice Handbook Scotland 1st ed - with new material

Bank arrestment stoppers

• Time to pay order
• Statutory debt solutions

There are certain actions and debt options the client can choose which will strike down the bank arrestment and have the effect of returning the arrested money to the client’s account. It will not mean any charges levelled by the client’s bank would be returned or refunded, that would be a separate argument with the bank.

Time to pay order

If a time to pay order (TTPO) is successful, it strikes down the arrestment. More information on how and when to use TTPOs is in Chapter 11.

If considering a TTPO, advisers must ensure that the client can afford the offer they are making and that they have followed the debt advice process before making the application.

As a tactic to lift the arrestment, it can work, and it may buy the client time to repay the debt, but be aware of ongoing liability and other debts.

Example

Martha decided to do a TTPO for last year’s council tax arrears. She then fell into arrears with this year’s council tax. A summary warrant was issued and a charge for payment then served and the 14 days of charge have passed. Martha could get her bank account arrested for the newest debt while the TTPO was in effect for paying the old debt.

Statutory debt solutions

•Minimal Asset Process bankruptcy, Full Administration Bankruptcy and creditor sequestration – as all debts must be included in a bankruptcy/sequestration, a bank arrestment will be struck down when they are awarded.
•Protected trust deed – when a client’s trust deed becomes protected and, as along as the debt is included, the bank arrestment is struck down. Advisers should be mindful that where the arrested amount is significant it may vest with the trustee.
•Debt Arrangement Scheme (DAS) – although it cannot stop an arrestment which has already been served on the bank, it can stop the furthcoming from happening, providing this is done within the 14 weeks of the bank arrestment having been served – ie, no monies will be released to the creditor. When the DAS is completed, any monies captured in the arrestment will be returned to the client. Advisers should be aware that with the nature of DAS this may take a considerable number of years.