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If a court has made a judgment in your favour, you can obtain a garnishee order to enforce the payment of your debt by the person owning that owes you money (the ‘judgment debtor’). If you have been sending letters to the judgment debtor with little effect, you can apply for a court order to garnish the judgment debtor’s wages or bank account. Essentially, this means you are able to dip into their income or accounts with permission from the court to recover the money they owe you. This article will outline: 

  • how a garnishee order works; and 
  • why you would seek one. 

How Does a Garnishee Order Work?

Typically after a court makes a judgment, you can enforce the payment through a garnishee order. 

For example, you may operate a business and have a customer with outstanding debts. If you tried to recover the money with a statement of claim and never received a response, a court could award a default judgement in your favour.

The garnishee 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 legally has to comply with it. Garnishee orders can be served to any type of debtor that owes you money subject to a judgment, including:

  • contractors;
  • customers; or 
  • tenants. 

The two main types of garnishee order are orders made to the judgment debtor’s: 

  • employer, allowing access to their salary; and 
  • bank or other accounts. 

1. A Garnishee Order Made to the Employer

If you serve an order on the judgment debtor’s employer, the employer will have to pay some of the judgment debtor’s wages to you until you receive full payment of 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. As at 1 October 2019, this amount is $516.40 per week. The order will remain in force until:

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

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, requesting that the bank gives you money held in the judgment debtor’s bank account; or
  • a third party, requesting that they pay you money they owe to the judgment debtor (for example, rent that a real estate agent collects on behalf of the judgment debtor for a property they own).

The bank, financial institution or relevant third party 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). The garnishee order will take any amount above $516.40 and give it to you. If the judgment debtor has enough in their account to cover the whole of the debt they owe you, you will only need to apply for the one garnishee order.

However, if the amount of money in the judgment debtor’s bank account is above the minimum amount required but does not cover the whole judgment debt, you will need to apply for a further garnishee order to collect the remainder. This is because a garnishee order to a bank or other institution works only once. On the other hand, a garnishee order for wages is ongoing. You can apply for the next garnishee order to the same bank or third party in another month or deposit cycle.

When should I Obtain a Garnishee Order? 

A garnishee order is one of a few options for recovering a judgment debt that somebody owes you. If you have already obtained a default judgment or a judgment following a hearing and you have sufficient information about the judgment debtor, such as where they work and live, a garnishee order could be a useful option for recovering the money. It is important to note that the larger the debt, the longer it will take to be repaid through a garnishee order. The length of time will depend on factors such as the judgment debtor’s salary. However, the advantage is that a garnishee order ensures that your judgment debt will eventually be paid. 

Key Takeaways

If you are a small business with outstanding debts that are subject to a court judgment, seeking to obtain a garnishee order may be an efficient way to receive compensation. Garnishee orders are effective in many circumstances to ensure you receive payment of your debt, either by garnishing: 

  • the judgment debtor’s wages; or 
  • directly from their bank account. 

If you are a small business with an outstanding debt, contact LegalVision’s litigation lawyers on 1300 544 755 or fill out the form on this page.


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