Aside from bankruptcy proceedings, which we discussed last month, there are other ways to enforce a court judgement to recover monies owed by a debtor (i.e. turning a paper judgement into actual recovery). A garnishee order is one such legal tool.
Rather than relying on the debtor to pay, a garnishee order allows a creditor to reach funds indirectly by stepping into the flow of money already owed to the debtor.
A garnishee order works by directing a third party to pay the creditor instead of the debtor. Most commonly, this involves a bank or financial institution holding funds on behalf of the debtor. Once the court makes the order, those funds (up to the amount of the judgement debt) can be redirected to satisfy the debt owed. It can also apply where another party owes a debt to the judgement debtor, effectively intercepting that payment before it reaches them.
In practice, after obtaining a judgement, a creditor applies to the relevant court, identifying the garnishee (i.e. the third party) and the amount outstanding. Once the court approves the application, it issues the order, which must then be served on the garnishee. From that point, the garnishee is legally required to pay as directed.
What makes garnishee orders especially effective is their targeted nature. They do not chase hypothetical assets; they operate on real, identifiable funds. In the end, a garnishee order is more than a procedural step – it is a practical mechanism that turns a court judgement into real recovery.
Yet despite the obvious advantages of a garnishee order, are there limitations? Stay tuned: we’ll explore that next month.
Ming Yip
Lawyer
