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Creditor takes money from my bank/building society account

This advice applies to Scotland

What happens if my bank account is frozen/arrested?

A creditor with the correct authority can stop you taking money out of your bank and building society accounts by freezing them. This is called arrestment. There are strict rules about how this can be done and there is a minimum balance protected in your account that you can still use that is £529.90 from 6 April 2019 (previously £494.01 from 6 April 2016).

There are particular rules that apply to a joint account.

How to challenge a bank arrestment

You may be able to object to a creditor forcing you to pay under a bank arrestment because:

  • you can argue that you and your family will suffer 'undue hardship'. This is a legal term. It may be easy to argue this if a lot of the funds are paid to you as benefits. This may particularly be the case when there are young children or elderly members in your family 
  • you have been allowed time to pay by a court
  • the creditor did not use the correct procedures

If you have been told that your accounts are to be frozen you must get help to sort out what options you have. Some of the funds going into your account should be exempt from being frozen, for example, your child benefit. However, it is sometimes difficult to get the bank to separate this out for you. You should get help from an experienced adviser to negotiate for you, for example at a Citizens Advice Bureau - where to get help.

Protected minimum balance in a bank account

If you have several bank accounts with the same bank the protected amount of £529.90 applies to all the accounts together. If you have several accounts but they are all in different banks the protected amount of £529.90 applies to each account separately. You should check carefully who you have your accounts with as some banks with separate names are in the same banking group. This could mean that the separate accounts may be treated as being with the same bank. The protected amount will be applied only once in that situation.

Joint bank account

You may need advice if you have a joint bank account.

If you have a joint account, the bank will normally freeze the full amount with a bank arrestment. However, you should be able to argue that the creditor is not entitled to receive the full amount in a joint account. The creditor will definitely be entitled to the full amount if:

  • only the account holder in debt paid money into the account (in which case all the money belongs to them), or
  • the debt was incurred jointly by the account holders, or
  • the account is in the joint names of a couple who have equal liability for the debt

If both joint account holders paid money into a joint account and the debt is not owed jointly it may be that the creditor would only be entitled to a proportion of the balance. To clarify this the account holders will need legal advice.

If you have a number of debts you should get help from an experienced adviser, for example at a Citizens Advice Bureau - where to get help.

Stages in the arrestment of a bank/building society account

There are certain types of debt where you may have deductions made directly from your bank account without a court process being followed because the creditor has fast track powers. For example this is the case when money is owed to the Child Support Agency for child maintenance or Department for Work and Pensions (DWP) for benefit overpayments. More about fast-track powers

Stage 1

A court or tribunal order or court or tribunal decision for payment of a debt (extract decree) or a warrant is issued and a charge is served. In the case of an extract decree being issued an additional charge may not need to be issued. The charge is a formal document which is presented to you, usually by officers of the court, called sheriff officers. The charge confirms that the creditor has the right to force you to pay the debt.

Stage 2

A  formal document called a 'schedule of arrestment' is served on the bank/building society (often called the third party).

Stage 3

A bank/building society freezes your account(s), and informs you of the arrestment. You cannot get access to the funds in excess of your protected minimum balance of £529.90 from 6 April 2019 (previously £494.01 from 6 April 2016).

Stage 4

The bank automatically releases the funds to the creditor 14 weeks after the date of the schedule of arrestment being sent to it. The funds can be released earlier than 14 weeks if you agree to this in a special mandate. The creditor maybe had powers to freeze the account before the court agreed to the court order but the funds in this case can still only be released 14 weeks after the court makes the order. You may be able to argue against the automatic release of the funds.

Apply for time to pay

For most types of debt, as long as applications for some time to pay the debt have not yet been made, you can apply to court or the First-tier Tribunal (Housing and Property Chamber) for time to pay. This will suspend the arrestment procedure. There is more information about how to apply for time to pay under the simple procedure on the Scottish Courts and Tribunal Service website .

If the debt is £5,000 or more

If you owe £5,000 or more the action being taken by the creditor is under a procedure called ordinary procedure in the sheriff court. If you are applying to the First-tier Tribunal for a claim of this amount you should call it for guidance. You should get help from an experienced adviser if you have a debt of this size, for example at a Citizens Advice Bureau - where to get help.

There is more information about applying for time to pay under this procedure on Form 05 on the Scottish Courts and Tribunal Service website.

If the debt relates to an order for payment or a decision from the First-tier Tribunal (Housing and Property Chamber)

You can find out more about applying for time to pay from the First-tier Tribunal website.

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