WAGE GARNISHMENT- If You Don’t Pay Unsecured Debt!

Let us understand! What happens if we cannot pay our unsecured Debt ? 

For that we need to know what is Wage –  Garnishment? 

Wage garnishment, is when money is legally withheld from one’s pay/salary and sent to another party. It refers to a legal process that instructs a third party to deduct payments directly from a debtor’s wage or bank account. Typically, the third party is the debtor’s employer and is known as the garnishee.

Garnishment: 

This term has been derived from the French word ‘garnir’ which means to warn /prepare. This concept of garnishment was introduced in civil procedure code by the amendment Act, 1976, which empowers the court to issue such an order on the application duly filed by creditor.

 It is the discretionary power of the court to issue a garnishee order & not a mandatory provision.

Garnisher: 

The garnisher is usually the creditor or the creditor’s representative, such as an attorney or a collection agency. They initiate the garnishment process by obtaining a court order or judgment that allows them to legally seize a portion of the debtor’s income or assets to satisfy the debt owed.

Garnishee: 

It is the person/entity who is liable to pay money to judgment debtor or to deliver any movable property to him which belongs to debtor. Apart from Judgment Debtor and Creditor (decree Holder), Garnishee is a third person in whose hands debt of the judgment debtor is kept for redressal, typically this third person may be the employer of the debtor or the bank which holds debtor’s money.

Garnishee Order: 

It is an order passed by an executing court directing or ordering a garnishee not to pay money to judgment debtor since the latter is indebted to the garnisher (decree holder/creditor). It is an Order of the court to attach money or Goods belonging to the judgment debtor in the hands of a third person.

I t is a remedy available to the Decree holder (Creditor). This is an Order served upon a garnishee directing him not to deliver the money or property of the debtor (defendant) to him and/or requiring him to appear in the court and answer to the suit of the plaintiff to the extent of the liability to defendant.

The power of the court bestowed under Rule 46A to issue court notice, is discretionary and the court may refuse to pass such Order if it is inequitable and the court apprehends that it can cause prejudice to the garnishee, or that the grounds of the application seeking that remedy is not sufficient or if the affidavit is filed by decree holder is frivolous or ambiguous, etc. The discretion, however, must be exercised judicially, where the court finds that the dispute against the claim is false or frivolous, it should not act under this rule.