In Part 1 we looked the process for issuing an Examination Notice. In Part 2 we detail the Garnishee Order and Writ for the Levy of Property processes.
- Garnishee Order
Often our clients will possess important information about the judgment creditor based on their (possibly now former) relationship and prior dealings. In these cases, a garnishee order is usually the first type of enforcement action taken.
A garnishee order is a Court order compelling a person who owes money to the judgment debtor to pay that money directly to the judgment creditor. It can be either in respect of a debt (for example, against the judgment debtor’s bank in respect of any funds held) or to the judgment debtor’s employer in respect of the judgment debtor’s wages/salary.
Debt
A garnishee order in respect of a debt is a once off order to recover the amount of the judgment debt. A garnishee order may be served for the full amount of the debt. If served on a bank (or other entity holding funds for the debtor) and the judgment debtor’s account has a balance of less than the judgment debt, the amount available will be removed and the bank is entitled to take $13.00 as an administration fee. However, if the judgment creditor’s bank account has a balance under $20.00, the bank does not need to comply.
If the full amount of the debt is not recovered, the judgment creditor can apply for another garnishee order to recover the remainder.
Wages/Salary
A garnishee order in respect of wages/salary is an order served on the judgment debtor’s employer requiring them to pay the judgment debt out of the judgment debtor’s salary. If the judgment debtor’s wage is garnished the judgment debtor must be left with a minimum amount of money of which to live on. The minimum amount that the judgment debtor must be left with is currently $500.60, and is reviewed in April and October each year. The amount which is above the minimum amount will be deducted until the judgment debt is repaid in full.
A common situation which arises once a garnishee order for salary is in place, is that the judgment debtor applies to the Court to change the repayment amount, proposing to the Court a suitable instalment amount. If the Court grants the instalment proposal amount, the garnishee order becomes an Instalment Garnishee Order.
If the judgment debtor’s income is the minimum wage amount or if they rely on a government pension it may not be possible to recover the judgment debt through this form of garnishee order.
- Writ for the Levy of Property
A Writ for the Levy of Property can be obtained as a means of enforcement of a debt.
This order grants permission to the Sheriff to seize the judgment debtor’s property and sell the property at auction. The proceeds of the sale (less the Sheriff’s fees) are then remitted to the judgment creditor in (complete or part) satisfaction of the judgment debt.
A significant and often persuasive feature of a Writ for Levy of Property is the attendance of the Sheriff’s officers to a judgment debtor’s home residence. The Sheriff Officers attend the residence in order record property belonging to the debtor which may later be sold at auction.
The Sheriff’s attendance may be enough to prompt a judgment debtor into repaying the debt or to enter into a repayment arrangement.
Read Part 3 of ‘The Road to Recovery: Enforcing a Judgment Debt’ next week.