Debt recovery: What is a Garnishee Order?

6-March-2013 Commercial Disputes By admin

If someone else owes money to the debtor, you, as the creditor, can apply for a Garnishee Order from the Court that enables that debt to be paid to you rather than the Debtor.

A Garnishee Order is most commonly served on a financial institution to recover funds held in the debtor’s account. This is why it is important to obtain bank account details of the debtor on any Credit Application, and also to keep copies of payments made by the customer by cheque.

Another form of Garnishee Order is the wage garnishee, which can be served on the employer of the debtor.

What happens if a financial institution or employer fails to comply with the order?   

If the Garnishee Order is not complied with, a Garnishee Summons may be issued to the third party to show cause why the payment has not been made. The Court may decide to make the garnisheed party (the financial institution or employer) responsible for the debt owed to you, the creditor.

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