What is a garnishee order, and how can you use it to get paid?

The process of recovering sums of money owed to you can be a long one. It starts with a letter of demand and hopefully ends with payment. What occurs between these two events ranges from simple and painless to nightmarish. Those who are unfamiliar with the tools available and the warnings signs to look out for can end up experiencing difficult times.

A garnishee order is a great way to enforce a judgment debt without resorting to the expense and uncertainty of bankruptcy proceedings. A garnishee order can often result in payment within 7 days of obtaining a judgment debt.

In this article, the person who owes the money is the “debtor” and the person who is owed money is the “creditor”. This article also assumes you have obtained a judgment against the debtor.

One tool which can be extremely effective is the garnishee order. What is this? Well, in simple terms:

·        It requires there to be a judgment debt.

·        It takes the form of an order from a Court.

·        It involves third parties other than the debtor, like banks or the debtor’s employer

·        Those third parties pay you the amount of the garnishee order if they are holding money for, or owe money to, the debtor.

For example, if you suspect that a debtor has funds in their bank account and you have a judgment debt against them, the Court can order the bank to pay the debts from the debtor’s bank account without the debtor being provided any notice of this occurring (until the money is garnished that is).

Another example is where a creditor issues a garnishee order to an employer and a weekly amount is ‘garnished’ from the debtor’s salary every week and paid to the creditor until the debt is paid off.

These examples of enforcement are useful where the debtor has money, but they are just not handing it over. It is important to note that a garnishee order is not appropriate where the debtor is impecunious.

There are also minimum amounts that need to be left for the debtor (in their account or weekly paycheque). So, if the debtor only has $500 in their account or earns minimum wage, you will not be paid much if anything at all.

What do you need in order to obtain a garnishee order?

1.      A judgment debt. Meaning the process of issuing a letter of demand, through to judgment is complete.

2.      You need to know the identity of the proposed garnishee. For instance, the debtor’s employer or whom they bank with.

3.      An application, along with an affidavit which complies with the civil procedure rules.

This is general advice only and should not be relied on. If you want specific advice that takes into account your circumstances or case then you should obtain independent legal advice.