What you need to know about garnishee orders

More protection, new limits added

Garnishee orders are a huge source of financial stress for millions of South Africans. If you have one, you need to know your rights and how to enforce them, or you may find yourself paying one that is either invalid or results in you paying more than what is due by you.

A garnishee order, the common name for an emoluments attachment order (EAO), is a court order instructing an employer to deduct money from an employee’s salary in instalments to pay one or more creditors. This means before you get your salary, your employer pays a chunk of it to a debt collection attorney or creditor until the debt is repaid.

The abuse of EAOs has been a problem for many years, as they have been made against consumers who have never had the opportunity to oppose the order or challenge the amount deducted in court.

There have been cases of consumers who have had almost 50% of their salaries deducted.

Recently, far-reaching changes have been made to the Magistrates’ Court Act, the law governing the issuing of EAOs, to ensure better oversight over the issuing of EAOs and limit the amount of your salary that can be attached.

These changes apply only to EAOs issued since the beginning of this month, but that doesn’t mean that you have no rights when it comes to older EAOs.

Clark Gardner, the CEO of Summit Financial Partners, says unscrupulous lenders and collectors are still stealing millions of rands via EAOs, but the ways in which this is done has changed. “The most common way is in the form of inflating the balances claimed,” Gardner says.

Summit assists employers to help their employees to better manage their finances through debt relief that includes auditing EAOs.

Gardner suggests that if you have an EAO, you:

Check where your EAO was ● issued and who issued it;

An EAO issued after August 1 must be issued in a court close to where you, the debtor, live or work, and it must be issued by a magistrate or a judge. In terms of the law you must be given the right to appear in the court where the EOA is issued and tell the court about your circumstances. If your EAO was issued in a court somewhere far from where you live or work, it is unlawful.

EAOs were also commonly issued by the clerk of the court. The law now states that only magistrates and judges can issue an EAO, and only after they are satisfied that it is fair;

Check on your lender.

●

Gardner says you need to check whether or not the credit provider who gave you credit

Check if credit provider is registered

is registered as a lender under the National Credit Act (NCA). Credit agreements with unregistered lenders are unlawful and can be rescinded. If your creditor extended credit to you recklessly, you may also be able to have your EAO rescinded; Check the amount being

● deducted. The law now says no more than 25% of your salary can be attached via EAOs.

Check the amount still

● owing; and

Check the fees being

● charged. One of the biggest problems with the collection of debt via EAOs is that you may be charged too much interest and legal fees when you have failed to pay your account timeously (or defaulted).

If you suspect you’ve been overcharged via an EAO, you can lodge a complaint with the office of the Credit Ombud.

Phone 0861-66-28-37, send an e-mail to ombud@creditombud.org.za or an SMS to 44786 and someone will call you.