Garnishee Proceedings: How to Seize Debtors’ Bank Accounts

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A garnishee is a technical term for someone who owes another person a debt. If a party has won a lawsuit against a debtor, the winner can apply various methods to enforce the Court’s judgement. One popular way to enforce judgements is by applying for Garnishee Proceedings (also known as Garnishee Orders).

In this guide, we’ll talk about:

  • How to file Garnishee Proceedings?
  • What assets can be seized by Garnishee Proceedings?
  • How are bank accounts seized by Garnishee Proceedings?
  • Can joint bank accounts be seized by Garnishee Proceedings?
  • When will Garnishee Proceedings be lifted from debtors?
  • How to protect yourself against Garnishee Proceedings?

How to file Garnishee Proceedings?

The procedure to file Garnishee Proceedings is found under Order 49, of the Rules of Court. If you’re a creditor and you have a lawyer, your lawyer will do all these steps for you.

Step 1: File Summons with Court

The Creditor (the person to whom money is owed) must file a Summons, along with an affidavit. An affidavit is a document detailing the evidence that supports a particular legal application.

The affidavit must contain the points below:

  • Cite the specific Court judgement to be enforced
  • Amount of unpaid debt, to show the garnishee has not fulfilled their obligations to their creditors
  • Garnishee’s identity
  • Additional evidence, e.g. garnishee’s finances, bank accounts, etc.

Step 2: Debtor presents defence (if any)

The Debtor will then be allowed to provide evidence on why they should not have a Garnishee Proceedings placed on them. The Court will arrange a hearing date for this. The Creditor must then personally serve (usually this is done by their lawyers) notice to show up for the hearing at least 7 days before the arranged court date.

If the Debtor pulls a no-show at the hearing, or does not contest that they owe the debt, the Garnishee Proceedings can be made final very quickly.

If the Debtor argues they don’t owe the debt anymore (e.g. they have already made payments), they must prove their case.

Step 3: Approval of Garnishee Proceedings

If the Court sides with the Creditor, the Court will approve the Garnishee Proceedings. The Debtor must pay all their debts owed to their Creditors.

What assets can be seized by Garnishee Proceedings?

The garnishee proceedings can target the Debtor’s bank account. The Creditor can specify the Debtor’s bank accounts to be frozen. The garnishee proceedings can force the bank to take money out of the Debtor’s account, and then transfer the money to the Creditor.

The power for Creditors to apply garnishee proceedings against bank accounts is provided under the Rules of Court, Order 49 Rule 1(3).

How does the Creditor know which bank accounts the Debtor has?

Bank accounts are usually private information. Thankfully, the law allows for Creditors to gain information on the Debtor’s bank accounts. This process is called Examination of the Judgement Debtor.

If the creditor has no information on the Debtor’s financial standing and bank accounts, or needs more information related to this, they can make an application to the Court. If approved, the Court will compel the Debtor to attend a hearing to provide evidence on their finances. The Debtor must also provide information on relevant assets they own. For instance, if the Debtor is a company, they will have to provide information like the financial statements, bank accounts, assets owned by the company, etc. If the Debtor is an individual, they will need to provide information on assets like their cars, houses, land, bank accounts, and other assets owned.

At the Examination, the Debtor must share information with the Creditor. The information revealed through this process will allow the Creditor to apply for garnishee proceedings. Refusing to show up to an Examination is an offence, and offenders can be jailed up to 12 months (or even 3 years). This provides a strong incentive for Debtors to not run and hide.

Also, lying during the Examination (e.g. providing incomplete set of bank accounts) is considered perjury. That is a very serious jailable offence. Those who lie in Court can be jailed up to 7 years.

Once the Debtor provides this information, the Creditor can pursue garnishee proceedings against the specific bank accounts that they wish to reclaim debts from.

Can Debtors transfer money away from accounts to be garnished, to prevent Creditors from claiming the funds?

Yes, but that would not be a smart move, because it would be discovered during the Examination process. Transfers can then be reversed once discovered.

How are bank accounts seized by Garnishee proceedings?

Creditors must serve the Court order onto the bank. Once that is done, the bank will comply and freeze the Debtor’s account. The Court can then make a final garnishee proceeding to seize the money in the bank account, and transfer it to the Creditor.

Can joint bank accounts be seized by Garnishee Proceedings?

Yes, joint accounts can be seized.

In the past, Singapore Courts were reluctant to allow joint accounts to be seized. However, in a recent landmark case, the High Court has ruled that joint accounts can be seized, as long as it can be proved all the money in the joint account actually belongs to the Debtor. This decision was made in the case Timing Limited v Tay Toh Hin & Anor [2020] SGHC 169.

In order to seize joint accounts, Creditors must:

  • Prove that all (not just some) of the money in the joint account belongs to the Debtor
  • Notify all the joint account holders of the Garnishee Proceedings being pursued
  • Promise to repay money (and additional costs) , should the court be satisfied that the money in the joint account subject to the order, is not, in fact, all payable to the judgment debtor

These requirements are a relatively high bar to clear. However, it’s important that joint accounts have this substantive level of protection against Garnishee Proceedings. This is key to protecting innocent joint account holders against the risk of having their money confiscated, simply because they shared an account with a debtor. That would be manifestly unjust.

Although it has not been tested in another case yet, this landmark ruling may lead to other cases where Creditors might be able to apply for Garnishee Proceedings in joint accounts where 100% of the money doesn’t belong to the Debtor. If the Debtor’s exact share of the joint account can be ascertained, then Garnishee Proceedings might be able to apply. We’ll have to wait for a new case to test whether the Courts will allow this to happen.

When will Garnishee Proceedings be lifted from Debtors?

The garnishee proceedings will only be lifted once the Debtor repays their debts in full.

How to protect yourself from Garnishee Proceedings and lawsuits?

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