In a previous blog post, we discussed what garnishee orders are and how creditors can use them to recover a debt. Here, we will be looking at how garnishee orders are obtained and processed in the states of New South Wales and Queensland. The processes are quite similar, but there are a few differences that are worth noting. Read on to find out more.
A garnishee order is a court order that allows a lender to recover a judgement debt from:
- a debtor’s bank account
- a debtor’s wages or salary
- an individual or company that owes money to the debtor
This court order is typically addressed to the garnishee—the third party that is holding money on behalf of the judgement debtor.
There are two main types of garnishee orders:
- garnishee orders for wages or salary (addressed to employers)
- garnishee orders for debts (addressed to banks, financial institutions, tenants, and other people holding money for the debtor)
Garnishee Orders in New South Wales
Obtaining a garnishee order in New South Wales involves following the five-step process outlined below:
Step #1: Obtain the right forms
Step #2: Fill out the forms
Step #3: File the forms
Step #4: Serve the garnishee order
Step #5: Garnish wages or salary / debts
Take note that some details involved in this process (such as the forms and information needed) will differ slightly depending on the type of garnishee order you are applying for.
Some Points to Remember:
In New South Wales, creditors are required to send the garnishee a sealed (stamped) copy of the garnishee order. However, they do not have send a copy of the order to the judgement debtor.
Here are some other important points you need to keep in mind enforcing a garnishee order in NSW:
I. Garnishee Order for Wages or Salary
- The debtor must be left with a minimum amount for living expenses. As of October 2018, this amount is $504.60 per week.
- The garnishee is allowed to deduct a maximum of $13.00 from the debtor’s wages/salary for administration expenses. This amount will come out of the money owed to you.
- The debtor can apply to the court for instalment payments. If this approved, the garnishee will be paying you the instalment amount specified by the court.
II. Garnishee Order for Debts
- The debtor must be left with a minimum balance (currently at $504.60) plus $20.00 in their account before the garnishee can take money out of it.
- If the debtor’s account balance is less than this amount, the garnishee does not have to comply with the court order.
- The garnishee is entitled to deduct up to $13.00 from the debtor’s account as administration fee. This amount will not be taken out from the funds owed to you.
- Centrelink benefits may be protected from the garnishee order.
- For this type of garnishee order, the debtor can also apply to the court to pay by instalment.
Garnishee Orders in Queensland
In Queensland, a garnishee order for wages or salary is called a “warrant of redirection of earnings”, while a garnishee order for debts is officially known as a “warrant for redirection from financial institutions”.
The process of obtaining a warrant for redirection in this state is similar to NSW in that creditors are required to fill out, sign, and file certain forms. Creditors must also provide enough information proving that the debtor can afford the redirection of funds. The registrar needs to be satisfied that the deductions will not cause unreasonable hardship on the debtor.
In Queensland, creditors are required to provide a copy of the enforcement warrant to both the garnishee and the debtor.
Here are some other key differences you must remember:
I. Warrant of redirection of earnings:
- The warrant of redirection of earnings will only come into force seven days after the employer is served.
- You also need to serve the employer with Form 79 (Notice to employer for redirection of earnings) and Form 80 (Notice that debtor is not an employee).
- If the debtor’s employment is ceased after the warrant is served, the employer is required to complete Form 81 (Notice of cessation of employment) and provide you with a copy.
II. Warrant of redirection from financial institutions:
- If the debtor’s bank account contains Centrelink benefits and/or a government pension, you must include the following endorsement in the warrant:
“To the Manager:
If Social Security benefits are paid into this account, please ensure that the saved amount, as stated in the Social Security Act, is protected from this Enforcement Warrant for Regular Redirection.”
- You or the debtor can apply to the court to have the warrant set aside, suspended, or varied. You can do this by filing Form 9 with Form 46.
Need Help? Call Us Today!
Slater Byrne would be happy to guide you through the whole process of obtaining a garnishee order. Give us a call at 1300 794 290.
Liam White joined the Slater Byrne Recoveries team in early 2013. He has worked across the credit & dispute resolution industry for a number of years. He is currently working in a Marketing/Head of Sales capacity at Slater Byrne Recoveries.