Garnishee Order: What is it and How Does it Work?

Author: Ian Aldridge, Progressive Legal

When it comes to enforcing a judgment debt, business owners in New South Wales hold a valuable tool at their disposal – the garnishee order. This straightforward legal mechanism allows you to reclaim owed funds directly from a debtor’s bank account, wages, or even from a third party.

Whether you’re seeking to recover a debt or facing a garnishee order yourself, this page provides essential insights and actionable steps to ensure you’re well-prepared for any scenario.

Enforcing a Judgment Debt

A Judgment debt is an order from a Court or Tribunal commanding the debtor to pay you a sum of money. In New South Wales, you have 12 years from the Judgment date to enforce your Judgment debt.

We recommend obtaining legal advice before commencing the process of enforcing a Judgment debt.

What is a Garnishee Order?

A Garnishee Order is a Court order allowing you to retrieve the Judgment debt from either of the following:

1. The debtor’s bank account(s);
2. The debtor’s wages or salary;
3. Someone who owes the debtor money.

Where do I start?

If you know the debtor’s bank account details, you may issue a Garnishee Order for Debts addressed to the debtor’s bank. This is a Court order that allows you to recover the Judgment debt directly from the debtor’s bank account.

Alternatively, if you know the debtor’s employer, you may issue a Garnishee Order for Wages or Salary. This is a Court order for the debtor’s employer to procure an amount of money from the debtor’s wage or salary and pay it to you until the Judgment debt is paid.

What if I need more information about the debtor’s financial circumstances and assets?

During the Garnishee process, you may not be sure of which Garnishee option would be appropriate in your situation, and/or require more information about the debtor’s financial circumstances. Obtaining information such as the debtor’s income, assets, debts, bank accounts, or other debts can be challenging, particularly if the debtor is not forthcoming with this information. 

In this situation, you can find out information about the debtor’s financials by issuing the debtor with an Examination Notice. The Examination Notice is posted to the debtor and requires them to provide you with this information.

If the debtor doesn’t respond sufficiently to the Examination Notice, you can issue an Examination Order. This orders the debtor to attend court, where you or your legal representative may ask them for information about their financial circumstances.

If the judgment debtor continually doesn’t attend court for this examination, the Court may issue the debtor with a notice saying that continuing to not attend can lead to their arrest. If the debtor doesn’t respond to this notice, you may then apply for a Notice of Motion Arrest Warrant for Examination, which is a warrant to be issued for the debtor’s arrest.

My Garnishee Order didn’t recover the full Judgment debt, can I do it again?

You can issue a Garnishee Order multiple times on the same debtor. For example, if a Garnishee Order on the debtor’s bank account doesn’t recover the full Judgment debt at that time, you may choose to issue another Garnishee Order to the same bank again in the future.

Where can I find the forms?

Get the relevant forms here:

1. Form 69 – Notice of Motion – Garnishee Order;
2. ​Form 70 – Garnishee Orders for Debts;
3. Form 71 – Garnishee Orders for Wages or Salary;
4. Form 71B – Garnishee Orders for Rent.​

What do I do if a Garnishee Order is issued against me?

Being issued with a Garnishee Order can have serious financial consequences, so you need to act fast if this happens to you. In this situation, you may choose to either:

1. Pay the Judgment debt in full;
2. Negotiate with the Judgment creditor;
3. Apply to the Court to pay by instalments;
4. Claim bankruptcy under the Bankruptcy Act 1966.

Key Takeaways

Garnishee orders are a strong tool for business owners in New South Wales to enforce judgment debts efficiently. As a business owner in NSW, understanding your rights and responsibilities when it comes to garnishee orders is essential for safeguarding your financial health and maintaining smooth operations.

Seeking professional legal advice is always a prudent step when dealing with complex legal matters like garnishee orders. Progressive Legal is here to assist you in navigating these legal waters and finding optimal solutions tailored to your business’s unique circumstances. Make an enquiry below to get in touch with our experienced dispute resolution lawyers.

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