Garnishee Increasingly Useful in Debt Collection

Although we have not felt the full brunt of it in Australia, in the USA and globally possibly the second worst economic downturn in history is occurring and this means that many people simply ignore you when you try to get your debts repaid. If a debtor has a job, sometimes the only option left for a creditor seeking to get repaid is to get a garnishee order which means removing money from the pay check of the person who owes them money. Statistics from Amercia indicate that this process has leaped in terms of its currency in the past few years of the economic crisis and although there is no national system of statistics, some states are reporting growth in garnishee filings by up to 121% in the Phoenix area since 2005, and another example is the rise of 55 percent in the Atlanta area since 2004.

“I think there’s a lack of accountability among debtors, and a lack of interest in reaching out to their creditors to resolve things amicably,” said Fred N. Blitt, president of the National Association of Retail Collection Attorneys. Although for some of these people, bankruptcy is an option, it actually quite expensive to file for bankruptcy and have the debts cleared away and it can cost as much as $2,000 in legal fees to go bankrupt and have the debts discharged. This literally means that a lot of low income earners are forced to save up for months or years before they can afford to file for bankruptcy and escape their debts with a fresh start.

The process by which garnishee is filed for is that when a creditor files their judgement and it is then heard, if no defence is filed, they can then get a default judgement. After this, they can then file a notice of motion to get a repossession order or in some cases a garnishee order.