How garnishees keep gouging debtors

Despite a landmark ruling from South Africa’s Constitutional Court (on the legality of certain elements of garnishees), and the laws being amended accordingly, the issue of aggressive and unethical collections is not “job done”. Pound of Flesh spoke to consumers and looked at the legal status of garnishees for Business Day in 2017. Below is an extract of the story. Read the rest of this at Business Live.


Global garnishee use

Emolument attachment orders (EAOs) are sanctioned by courts as a solution to the “problem” of debtor default. Most of what is called “garnishees” in SA are actually EAOs.


EAOs are court-issued documents served on employers of debtors, compelling them to garnish the debtor’s wages and submit these payments to the creditor who secured a judgment. EAOs are administered by the Magistrates’ Court Act, the National Credit Act, the Debt Collectors Act and other legislation such as the Basic Conditions of Employment Act.

Garnishees are supposed to be the nuclear option when all other attempts to compel repayment have failed. The fallout is nuclear too.

In 2012, garnishee orders and overindebtedness were closely linked with the Marikana massacre. Garnishees and loans from registered credit providers and unregistered loan sharks were a significant contributing factor to the Marikana wage dispute and strike.

In 2015 and 2016, the Stellenbosch Law Clinic, 15 consumers (mostly workers from the winelands) and their advocates took on 13 creditors, the law firm Flemix & Associates, the justice minister, the minister of correctional services, the trade and industry minister and the national credit regulator.

Read the rest of this at Business Live.