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If a court has made a judgment in your favour, you can enforce the payment of your debt through a garnishee order. Put simply, this means that the court will direct a third party to pay you, instead of the person that owes you money (the ‘judgement debtor’). The third party is called a ‘garnishee’. A garnishee order is a legal notice that allows you to collect the amount from either:

  1. the judgment debtor’s wages;
  2. the judgment debtor’s bank account; or
  3. other people who owe the judgment debtor money (e.g. a real estate agent who is collecting rent).

This article will set out how:

  • a garnishee order works; and 
  • to enforce one. 

How Does a Garnishee Order Work?

After obtaining a judgment, you can typically enforce the payment by issuing a garnishee order. This court order instructs a third party (such as the judgment debtor’s employer or bank) to redirect their wages or holdings to you. Once the court issues a garnishee order, the employer or bank must comply with it. The court can issue garnishee orders to anyone against whom you have received a judgment for payment of money, including: 

  • contractors;
  • customers; or 
  • tenants.

There are two main types of garnishee order. Namely, these are orders the court makes to the judgment debtor’s:

  • employer, providing access to their salary; and
  • bank, providing access to their account(s). 

1. A Garnishee Order Made to the Employer

If you serve a garnishee order on the other party’s employer, the employer must pay some of the judgment debtor’s wages to you until they have paid off the debt. This is called a garnishee order for wages or salary. When the judgment debtor’s wages are garnished, they must be left with a minimum amount of money to live on. Currently, this amount is $516.40 per week (as at 1 October 2019). The order will remain in force until:

  • you receive the whole amount of the judgment debt; or
  • the court makes other orders. 

It is important to note that you cannot garnish a judgment debtor’s Centrelink benefits to enforce the repayment of a judgment debt. If a judgment debtor’s only income is Centrelink benefits, you cannot use this option to enforce a debt.

2. A Garnishee Order Made to a Bank or Financial Institution

The other way to make a garnishee order is to address the order to: 

  • a bank or other financial institution (to give you money the judgment debtor holds in their bank account); or
  • a third party (to pay you money which they owe to the judgment debtor, e.g. rent a real estate agent collects on behalf of the debtor for a property which they own).

The bank or financial institution does not have to comply with the order unless the judgment debtor has a minimum balance amount of $516.40 plus $20 (as at 1 October 2019). If the money the judgment debtor’s bank account does not cover the whole judgment debt, you can apply for another garnishee order in the next deposit cycle or next month, whichever is most likely to get a result. It can be hard to know when, or even if, a judgment debtor will have money deposited into their account, so this may be a guessing game unless you are aware of the judgment debtor’s financial cycles. 

What Happens if the Debtor Asks to Pay Their Judgment Debt Back in Instalments?

Often, after the garnishee order process begins, the debtor makes an application to the court for an instalment order. Here, the court can grant a judgment debtor the right to pay the judgment debt by instalments. To get an instalment order, the judgment debtor must:

  • list their average income and outgoings for each month; and 
  • suggest an amount that they are able to pay towards the judgment debt each month. 

If you disagree with the court’s order, you can file an objection within 14 days of receiving the decision. You can then tell the court that they should either:

  • not make an instalment order;
  • change the amount of the instalments; or
  • increase how often the debtor pays the instalments. 

What Happens if the Garnishee Does Not Comply With the Garnishee Order?

If the court issues the garnishee order on the debtor’s employer but the employer does not comply with the garnishee order, you can go back to the court and request an order that the employer pays the judgment debt instead. This is one way to ensure compliance with your garnishee order. 

Key Takeaways

A garnishee order can be a useful debt enforcement tool. Essentially, it bypasses the judgment debtor and goes directly to a third party to obtain payment for a debt. As a garnishee order for wages chips away at the debt gradually, it is most suitable for smaller amounts. On the other hand, a garnishee order to a bank or other institution may result in payment of the full judgment debt. This will only be the case if there is enough money in the account, however. Otherwise, you will need to re-issue the order in future months or intervals and try again. If you need assistance with enforcing a debt, get in touch with LegalVision’s debt recovery lawyers on 1300 544 755 or fill out the form on this page. 

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