When a creditor (Judgment Creditor – JC) successfully obtains a court judgment against a debtor (Judgment Debtor – JD), one of the legal methods available to recover the debt is through a process called garnishment. In this article, we will explore how garnishment works to freeze the debtor’s bank account or redirect debts owed by third parties to the debtor, with the aim of recovering payment.
What is Garnishment?
Garnishment is a legal process where the creditor applies to the court for an order that directs a third party who owes money to the debtor to instead pay that amount directly to the creditor. This usually involves freezing and withdrawing funds from the debtor’s bank account. It can be used against individuals or companies.
How Does the Garnishment Process Work?
- Obtain a Court Judgment: The creditor must first have a valid judgment against the debtor.
- Apply to the Court: After obtaining the judgment, the creditor must apply to the court for a garnishment order. This application must include evidence of the judgment and information about the third party who owes money to the debtor, or details of the debtor’s bank account.
- Court Issues an Order: If the application is successful, the court will issue an order directing the bank to freeze the debtor’s funds up to the judgment amount. The bank will then be instructed to pay the frozen amount to the creditor.
- Third-Party Debt: If it involves third-party debt, the court will order the third party to pay the creditor directly instead of the debtor.
- Effectiveness of Garnishment Depends on Two Main Factors:
- Sufficient Funds in the Account: If the debtor has enough money in their bank account, garnishment can be a fast and effective way to recover payment.
- No Funds or Low Third-Party Debt: If the debtor’s account is empty or the third party doesn’t owe much, this process may yield little to no recovery. The debtor might have moved their funds, or the third party may have other claims that reduce the amount that can be recovered.
This process typically takes around 3 to 5 months, depending on the smoothness of the application and cooperation from the bank or third party.
One of the main challenges in garnishment is obtaining accurate information about third parties who owe money to the debtor or the debtor’s bank account number. Without this information, the process can become more complicated.
Garnishment can be a quick and effective method for creditors to recover debts but only if sufficient information is available and the debtor has accessible funds or collectible third-party debts. Before proceeding with this method, ensure you have the necessary information to facilitate the process.