Credit Score Basics > Does a court order for earnings affect my credit rating?

Does a court order for earnings affect my credit rating?

Wollit Team1 minute read · Updated 16th September 2024

An Attachment of Earnings Order is a court order that allows creditors to take money directly from your salary to pay off debts. This usually happens after a County Court Judgment (CCJ) has been issued against you for unpaid debts. The order tells your employer to deduct a certain amount from your paycheck and send it to the creditor until the debt is fully paid.

Here is how it works and how it can affect your credit.

How does an Attachment of Earnings Order work?

First, the creditor must obtain a CCJ against you. If you do not make payments, the creditor can apply for an AEO.

You will then receive a form that you must fill out and return to the court, explaining your financial situation. The court will look at the information you gave and will decide how much money can be taken from your wages. The amount deducted is based on your earnings and is meant to leave enough money for living expenses.

Once the court grants the order, the employer must follow it and deduct the specified amount from your salary.

An AEO stays in place until the debt is completely paid off. This can sometimes last longer than six years, as the AEO continues until your creditor is satisfied.

What happens if I change jobs?

If you change jobs, the AEO does not automatically transfer to your new employer. The creditor must apply to the court for a new AEO against your new employer, which can slow down the repayment process.

Can I stop an Attachment of Earnings Order?

Yes – you can ask the court to suspend the AEO if you can show that it would cause you serious financial hardship. This involves filling out quite a few forms as well as giving solid reasons for your request.

Will an Attachment of Earnings Order affect my credit rating?

An AEO itself does not show up on your credit report and it does not affect your credit score by itself.

However, the CCJ that led to the AEO will be recorded and can hurt your credit score.

A CCJ stays on your credit report for six years, which can make it harder to get loans, mortgages, or credit during that time. Once the CCJ is removed, it will no longer affect your credit rating.