We issue Garnishments often. It is the most popular way of enforcing a judgment. Some Garnishees, however, have no idea what they are obligated to do.
A “Garnishee” is a third party who is ordered by the Court, by way of a Notice of Garnishment to pay a specified amount into Court to settle a debt owed by the Debtor.
The two most popular types of Garnishments are:
- Bank accounts; and
- Employment
When a Garnishment is served on a Garnishee, they are also served with the Garnishee’s Statement. Both documents clearly outline the Garnishee’s obligations and the repercussions of failing to comply with the Garnishment, which is a Court Order.
The Garnishee’s Statement must be served on the Creditor, or their representative within 10 days from the date of being served with the Notice of Garnishment. One of the biggest issues with Garnishees is their failure to serve the Garnishee’s Statement, which results in us having to chase them down for an update.
If the Garnishee is a Financial Institution, they must immediately freeze the account(s) at the branch where the Garnishment was served, and the institution must remit the amount of the Garnishment to the Court. Should the full amount of the Garnishment not be available, whatever is in the account(s) must be remitted.
If the Garnishee is an employer, they must remit 20% of the Debtor’s net wages as they become due to the debtor until the amount of the Garnishment is paid in full, or until the Debtor is not longer employed by the Garnishee.
Every time a payment is remitted, the Garnishee’s Payment Notice must be served on the Creditor or its representative. This also doesn’t always happen.
Garnishments remain in effect for 6 years, however, can be renewed by the Court at the request of the Creditor. Garnishments can also be terminated by serving the Notice of Termination of Garnishment on the Garnishee.
Its important to respond to the Notice of Garnishment, whether you are an employer or financial institution within the prescribed time.
Failing to do so, can result in the Creditor requesting a Garnishee Hearing to obtain an Order that the Garnishee be liable for the full amount owed to the Creditor.
Murray Brown, Licensed Paralegal