Part 3: Garnishee Orders
There are two main types of Garnishee Orders which are issued in the Local Court. These include the Garnishee Order for Debts and Garnishee Order for Wages or Salary.
- Garnishee Order for Debts:
- The most common Garnishee Orders are those which are served on the debtor’s bank account. The rider is that the rules now require you to specify the debtors bank account number.
- If the debt owed to the debtor is also owed to another individual or entity, such as a joint bank account, the garnishee does not have to pay the sum to the debtor.
- Garnishee Order for Wages or Salary:
- The Garnishee Order is issued on a person’s employer for their wages or salary.
- There is a prescribed amount which must remain within the bank account of the debtor. This is what is known as “the weekly compensation amount” and is $523.10 as of 1 April 2020.
- This prescribed amount is adjusted in April and October each year.
- Filing a Garnishee Order for Wages or Salary often prompts the debtor to make an application to pay the debt by instalments.
- If the application for the instalment plan is granted by the Court, the Garnishee Order will operate for the instalment amount to be drawn instead.
- Garnishee Summons:
- If the Garnishee fails to comply with the Order, the creditor can seek an order for a judgment against them for the debt or for the wages or salary.
- This can be done by way of issuing a statement of claim on the Garnishee and seeking payment by relying on section 124 of the Civil Procedure Act 2005 (NSW).
- Caution should be exercised when issuing such proceedings noting that issues may arise with evidence if the Garnishee disputes the amount owing and you need to justify a debt which is owed to the debtor without their assistance.