The process by which a person who is in the possession or control of another person’s property or money, or owes the other person money, is ordered by a court to pay a third person instead, in order to settle the other person’s debt to the third person.

Garnishment is sanctioned via a garnishee order, which can be obtained by application to the court. Where approved, a garnishee order binds the third party to pay the creditor any funds they hold that amount to greater than the minimum balance ($504.60 as at 1 October 2018).

The most common garnishee order is for wages or salary. This order is served on a debtor’s employer. Notifying the debtor who is the subject of a garnishee order for wages is not required. A garnishee order for wages continues until the full amount owing is paid or until it is cancelled by the court.

Another common type of garnishee order is for debts owed to the debtor (i.e. issued to the debtor’s bank, tenants, or clients owing money). A garnishee order for debts requires a single payment up to the value of the judgment debt.

Where the debtor receives Centrelink payments, these are exempt from garnishee orders. In order to contest a garnishee order, or stop it from operating, a debtor can:

• Apply to the court for a stay of enforcement;
• Pay the judgment debt;
• Apply to the court to pay in instalments; or
• Apply to the court to set aside a default judgment.