By: Nicolette Dirk, finance writer, Justmoney.co.za
A garnishee order is one of the worst penalties indebted South Africans have to face for not being able to pay up. But what are your rights when it comes to these orders and how do you determine whether the order is valid? How much can legally be taken off your salary? What are employer’s roles and responsibilities when it comes to garnishee orders? We chatted to a debt expert to find out.
Wikus Olivier, debt counsellor at DebtSafe, says a garnishee order, or an emoluments attachment order (EAO) is an instruction by the court to an employer to make deductions directly from a consumer’s salary in order to pay a debt.
“The employer is then responsible to deduct those funds from the employee salary and pay it over to the credit provider on a monthly basis. If a creditor obtained a garnishee order and has a warrant of execution, the property of the employer can be attached if employer fails to give effect to the EAO,” says Olivier.
Also, when the employer fails to pay over the said amount as per the EAO, the employee has legal recourse and may have a legal claim against the employer for being negligent.
How are garnishee orders issued?
Olivier says usually garnishee orders are used as a last resort.
“In many cases credit providers ask the consumer to sign a "consent to judgment", which enables them to go directly for a judgment and obtain an EAO. In the normal sense of things, if you are in default for 20 days or more, a credit provider has to issue a section 129 notice,” says Olivier.
He adds that this notice gives you ten more days to talk to a debt counsellor or make a plan with the arrears amounts. If you still have not done anything by the end of those ten days, a credit provider can issue a summons.
“This summons also has a notice period of ten working days before the court can hear the case. When presenting the application to court, the credit provider can ask directly for an EAO to be implemented,” says Olivier.
But usually this is only done after a judgment has been granted and no payments have been received. If you are under debt counselling or debt review there is some protection because a credit provider cannot proceed with legal action and obtaining a garnishee order if you are under this process. .
What are your rights when it comes to garnishee orders?
Olivier says that you have the right to dispute an EAO if it seems dodgy and you suspect that the order may be fake. If the balance claimed is incorrect, a debtor also has the right to dispute the EAO.
How do you determine whether the order is valid?
Most of the responsibility of validating a garnishee order lies with the employer. When considering some of the dodgy garnishee practices that came to light in an audit recently done by the Pretoria Law clinic, Olivier says it is important for any employer to keep a few things in mind when confronted by an EAO:
1. Make sure that there is only one garnishee for each debt. In some cases two attorneys have been known to collect on the same account, resulting in duplicate payment.
2. The Magistrates Court Act states that a debtor must not be garnished beyond their means. To keep an employee motivated, employers should inform their employees about this and, if required, assist them to challenge dodgy garnishees.
3. It is also important to note that, in terms of jurisdiction, garnishees must be obtained in the area where the debtor is employed.
4. Scrutinise a garnishee order to ensure that they are in fact a valid document issued by a court.
5. It is important for the employer to discuss each EAO with the employee to ensure their accuracy.
How much can legally be taken off your salary?
The Magistrates Court Act states that a debtor cannot be garnished beyond their means. This means that during the application for a garnishee order, the full income and expenses of the debtor must be presented.
“We have seen many consumers with net take home pay of less than R45 as a result of excessive garnishee. An EAO may be rescinded or amended if the judgment debtor can prove that the portion of his wages left after the instalment is deducted is insufficient for purposes of providing for himself and his dependants,” says Olivier.
He adds that this may result in the order being stopped or the instalment amounts being lowered. This will have to be done by way of an application to court. But unfortunately there is still no statutory cap set to the amount that can be attached.
Avoid the garnishee order pitfall
Olivier says it is important for consumers to understand that debt will not simply disappear.
“I know how bad it feels to get letters in the post when you just know it is going to be trouble. You are too afraid to open them, and they end up in a heap or in some drawer where you don't have to see them. But by ignoring these letters, you create more problems that can quickly spiral out of control,” says Olivier.
If you are being hounded by debt collectors, take immediate action by talking to someone who knows how to deal with credit providers and arrear accounts.
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