A garnishee order is a legal directive that allows creditors to recover outstanding debts by seizing funds directly from a debtor’s wages or bank account. While this mechanism ensures debt repayment, it can sometimes be applied unfairly or erroneously. Many individuals and businesses are unaware that a garnishee order can be challenged under specific circumstances. Understanding the legal remedies available is crucial to protecting your financial stability.
Understanding Garnishee Orders
A garnishee order is typically issued by a court at the request of a creditor who has obtained a judgment against a debtor. The order is served on a third party—such as an employer or a bank—that holds funds on behalf of the debtor. This third party is legally required to comply with the order, ensuring that the creditor is paid directly.
While garnishee orders are legally binding, debtors have the right to contest them in certain situations. Below, we explore the main grounds for challenging a garnishee order and the legal remedies available to those affected.
Grounds for Challenging a Garnishee Order
Procedural Errors
A garnishee order must follow strict legal protocols. If there were procedural errors—such as failure to notify the debtor properly, incorrect documentation, or a lack of due process—the order may be deemed invalid. In such cases, legal action can be taken to dispute the order’s legitimacy.
Incorrect Debt Amount
Errors in the calculation of the outstanding debt can lead to an unjust garnishment. If the amount specified in the order is incorrect, the debtor can request a review to ensure that only the legally owed sum is deducted.
Exempt Income
Certain types of income are protected from garnishment. These may include social welfare payments, pension funds, disability benefits, and child support payments. If the funds being seized fall under these categories, the debtor can seek legal intervention to have the garnishee order revoked or modified.
Financial Hardship
A garnishee order should not leave a debtor unable to meet basic living expenses. If the deductions cause severe financial hardship, courts may consider modifying or suspending the order. Providing evidence of income, expenses, and essential obligations can support a hardship claim.
Employer/Bank Defences
In some cases, an employer or financial institution may have valid reasons to challenge a garnishee order. If complying with the order would violate legal restrictions, result in unfair treatment of an employee, or cause operational difficulties, the third party may petition the court for relief.
Legal Remedies Available
Applying for a Variation Order
A debtor can request a variation order to change the terms of the garnishee order. This may involve reducing the amount deducted or temporarily suspending the order based on changed financial circumstances.
Filing an Objection in Court
If a debtor believes a garnishee order is unjustified, they can formally object in court. This requires submitting a legal application outlining the reasons for disputing the order, along with supporting evidence. The court will then review the case and determine whether to uphold, amend, or revoke the order.
Negotiating with the Creditor
Direct negotiation with the creditor may offer an alternative resolution. Some creditors are open to setting up revised payment arrangements instead of enforcing a garnishee order. By demonstrating a willingness to repay through an alternative plan, debtors may successfully avoid garnishment.
Conclusion
Garnishee orders are powerful tools for debt recovery, but they are not always applied correctly or fairly. Understanding the grounds for challenging an order and the legal remedies available can help protect your financial well-being. If you are facing a garnishee order, it is crucial to explore your options and seek professional guidance.
At DCM Corporate, we specialise in providing expert advice on debt recovery, financial disputes, and legal compliance. If you need assistance with a garnishee order or want to explore your legal options, contact us today to discuss your case.