What is a garnishee order?

A garnishee order is an order of court obtained by a creditor to recover unpaid debt.

The creditor can be anyone the debtor owes money to. The creditor will obtain Judgment against the debtor and serve the order on a third person, the garnishee.

Simply put, the court instructs a third party to pay money owed to the debtor, directly to the creditor in order to pay the debt.  The third party is called a ‘garnishee‘.

What is an EOA?

An EOA is almost the same as a garnishee order. While a garnishee order is served on any third party owing money to a debtor, the EOA is served on a debtor’s employer. The employer will deduct amounts from the debtor’s salary and pay it directly to the creditor. In this case the employer is also the garnishee.

Gone are the days where credit providers could attach any amount they deemed fit from a consumer’s salary and get away with it.

For many years consumers suffered at the hands of debt collectors who did not take the time of day to do affordability assessments to see whether a person would be able to afford an Emoluments Attachment Order (EOA), commonly known as a garnishee order. Due to new laws passed, consumers with “garnish” orders can breathe a bit easier.

In the past EAO’s were obtained from almost any court, regardless of where the debtor lived or worked. The EAO’s were authorized by the clerk of the court without the debtor being present to defend himself. In other words, no questions were asked, and any creditor could obtain any amount of EAO’s against a debtor.

Because of the lack of control over EAO’s, the signatures of debtors were forged, and huge amounts were garnished from their income. After the Marikana incident it was found that many of the miners there had between 80% and 100% of their salaries garnished.

What has changed?

  • The new law imposes a limit on the deduction amount. Only 25% of a worker’s salary may be “garnished” regardless of the number of EAO’s.
  • The 25% applies only to a worker’s basic income and not overtime or commission.
  • The EAO has to be issued by a Magistrate in a court that is in the same area where the debtor lives or works. In other words, the court must have jurisdiction.
  • The Magistrate has to make sure that the EAO is fair and that the debtor can afford the amount.
  • The Magistrate needs to assess the debtor’s other EAO’s and make sure that the debtor has enough money left to survive.
  • No creditor may ask a credit applicant to sign a consent to judgment prior to approving a loan. Creditors doing this will receive a fine or prison sentence.
  • Any person who fraudulently obtains or issues a Judgment could receive a fine and/or prison sentence of up to 3 years.

So, what can I do about existing EAO’s

Now that there are laws that protects you, go and speak to your employer first. They can speak to the Attorney that issued the EOA and ask them to reduce the amount. The employer could also reduce the amount and deal with the attorneys later, should they have to. The Attorneys will probably not contact your employer as they are well aware of the new laws. Although this is not the recommended way, it will definitely be the easiest.  You could also go to court and ask them to reduce the amounts or completely cancel the EAO’s.

At Sandton Debt Counselling we assist all our clients with Garnishee orders by reducing or cancelling the EAO’s, when possible. Contact a Debt Counsellor now for expert Debt Counselling advice. We will reduce your monthly instalments and interest rates and also make sure that you don’t pay more than the allowed amount on any EAO. Our trained team will put a smile back on your face!

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