A garnishee order is a common form of enforcing a judgment debt against a creditor to recover money. Put simply, the court directs a third party that owes money to the judgement debtor to instead pay the judgment creditor. The third party is called a ‘garnishee’. A garnishee order is a legal notice the court issues that allows the creditor to collect the amount from either:
- the debtor’s wages,
- the debtor’s bank account, or
- other people who owe the debtor money (e.g. a real estate agent who is collecting rent).
We set out a practical guide below for creditors seeking to obtain a garnishee order.
How Do I Obtain a Garnishee Order?
The court typically makes a garnishee order for a debtor’s wages or bank account. A creditor can get this information from prior knowledge or an examination of the debtor. The order then directs a debtor’s employer to take an amount of money from the debtor’s wage to pay the creditor.
When seeking a garnishee order, the general process is as follows:
- Complete the garnishee application.
- Form 69: Notice of Motion, and
- Form 70: Garnishee order for debts, or
- Form 71: Garnishee order for wages or salary.
A justice of the peace, solicitor or barrister must also witness the creditor signing the Notice of Motion.
- File the forms in court.
- Serve the filed forms on the garnishee.
It’s often after the garnishee process is underway that the judgment debtor makes an application to the court for an instalment order. Here, the court can grant a debtor the right to pay the debt by instalments. If a creditor disagrees with the court’s order, they can file an objection within 14 days of receiving the decision by completing a Form 50 – Notice of Motion Objection to Instalment Order. In this form, a creditor can say that the court should either:
- not make an instalment order, or
- change the amount or the instalments, or
- increase how often the debtor pays the instalments.
Importantly, the creditor cannot garnish the entirety of the judgment debtor’s wages. They must have a minimum amount left each week to live (the currently prescribed amount is $484.10). The wages, will, however, continue to be deducted (or ‘garnisheed’) until the debtor satisfies the outstanding debt.
Additionally, a creditor cannot garnish a debtor’s Centrelink benefits for a garnishee order. If a judgment debtor’s only income is Centrelink benefits, then this is unlikely the best option to enforce a debt.
What Happens if the Garnishee Doesn’t Comply With the Garnishee Order?
A creditor can file an application requesting the court make an order than the garnishee pay the judgment debt instead. There is no specific Court form for this instance, so a Notice of Motion and Affidavit is required. The Affidavit should depose information about the service of the garnishee notice and the fact the garnishee has not complied with it.
A garnishee order can be a useful debt enforcement tool, essentially bypassing the judgment debtor and going to a third party to obtain payment for a debt. As a garnishee order ‘chips’ away at the debt, it’s best used for smaller amounts owing.