Understanding the legal terminology associated with your business can be confusing. One of the terms you may come across is Garnishee. So, what is a garnishee?
Simply put, a garnishee is an individual or entity, such as a bank, that holds property or money owed to the defendant (debtor) in a court judgment. The debt is the amount of money passed down by a court judgment for unpaid bills or a breach of contract. The garnishee will then be responsible for holding money or property for the benefit of the plaintiff (creditor).
For example, if two parties, John and Bob, engage in a contract and John breaches the contract by not paying Bob for the work that was done, Bob can take John to court and obtain a court judgment for a certain amount of money. From there, the court might issue a garnishing order which requires the bank, or another entity, to freeze John’s assets in order to keep them safe for the purpose of the debt. This would be considered a garnishee.
Pros & Cons of Garnishee
Using a garnishee can be beneficial in some cases. The advantage to garnisheeing is that it can ensure that any property or money owed to the debtor is used to fulfill the court’s requied judgment. Therefore, it can quickly and efficiently resolve any outstanding debt between the parties.
On the other hand, a disadvantage to garnisheeing is that it can be a lengthy and frustrating process. It can also be expensive. In some cases, the fees related to obtaining and executing a garnishing order can exceed the amount of the debt itself.
Garnishee in Practice
Garnishee is commonly used in a variety of legal contexts, from debt and bankruptcy to workers’ compensation and family law. It is also used to satisfy a lien or other indebtedness. Whether it’s a bank, a creditor, or any other entity, garnisheeing is one way to protect the rights of the investor or creditor in the debtor’s assets.
Garnisheeing can be a useful tool for collecting debts, however, it must be used judiciously, as it can be an expensive and lengthy process. It is important to understand all the applicable laws and regulations in order to ensure a positive outcome when garnisheeing.