...Stakeholders have been calling for reform, and in particular for the introduction of an alternative method of enforcement i.e. attachment of earnings orders (AEOs). The banks have indicated their support to finding alternatives to debtor imprisonment and have welcomed the LRC consultation paper38.
AEOs would offer creditors at least some chance of recouping their money, albeit in small amounts over long periods.
Attachment of Earnings
As far back as 1998 there were calls for the introduction of an attachment of earnings (AEO) procedure as part of the Irish debt enforcement process 39.
An AEO is directed against the debtor’s employer requiring them to deduct specified payments from the debtor’s salary. These payments are then used to repay the debt owed to the creditor. The order will direct that the debtor’s income not be reduced below a certain amount taking into account his day to day needs, these are deemed protected earnings.
AEOs are widely used in the debt enforcement processes of other European countries 40.
According to various commentators in the U.K. AEOs are and have always been extremely popular as an enforcement mechanism because they are easily made, low cost and effective 41. Their effectiveness must be balanced however with the fact that AEOs may result in negative consequences for an employee in terms of promotion etc, and unlike other enforcement mechanisms where an AEO is in force a creditor can not pursue any other means of enforcement.
An alternative to imprisonment
AEOs have been available in Ireland as an alternative to imprisonment when seeking to enforce maintenance orders in family law proceedungs since 1976 42. Originally these orders could only be sought when a party defaulted in relation to a maintenance order, now both orders can be granted simultaneously.
There is mixed feedback on the effectiveness of AEOs. According to the LRC, anecdotal evidence suggests they are working reasonably well. FLAC in their 2003 Report An End based on a Means43 examined AEOs and did not recommend their introduction in the debt enforcement process. They did however accept that attachment is infinitely preferable to imprisonment and that if imprisonment for non-payment of an instalment order is to be brought to an end, then from the creditor’s perspective, a new method of enforcement would need to be put in place.
Accordingly, they put forward a number of proposals for an attachment of earnings model:
● attachment of earnings should not be permitted in relation to social welfare payments;
● attachment of earnings orders should not be granted at the same time as instalment orders, so that debtors have the opportunity of meeting the terms of the instalment order prior to their employer being contacted given the negative consequences that might result;
● where an attachment of earnings order is sought by a creditor, a court can look at the entirety of the debts owed by a debtor and order a consolidated AEO.
AEOs are not new to the Irish legal system and have proven more successful than committal orders in family law proceeding 44.
