Debt recovery: What is a Garnishee Order?

6-March-2013 Commercial Disputes Debt Recovery By Jamal Bakalian

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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Written by Jamal Bakalian

Jamal Bakalian

After studying a double degree in Law and International & Global Studies at Sydney University, Jamal completed her GDLP at the College of Law. She is currently undertaking her Masters of Law (majoring in Commercial Litigation). Jamal has been practicing Law for 5 years. With a passion for resolving disputes, Jamal is a valuable member of the Commercial Litigation team at Streeterlaw.

Call us on 02 8197 0105 to book an appointment with Jamal Bakalian!

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