It is not correct that attachment orders, or legally more correct, emolument attachment orders (“EAO’s”), against your salary (generally, however incorrectly, referred to as ‘garnishee orders’) are no longer allowed and that these orders will now immediately be stopped. What is correct though, is that substantial relief has been provided for debtors against the burden of these EAO’s.
Our Constitutional Court recently reviewed the environment within which EAO’s are issued and as of 13 September 2016 introduced judicial oversight for the issuing of EAO’s and extra safeguards to protect debtors from credit providers utilising the EAO system to their advantage, effectively aligning the current legislation for the issuing of EAO’s with the Constitution. Importantly – this does not mean that all credit debt is now written off or that all EAO’s are now invalid, as the court order will not affect existing EAO’s, unless they are individually challenged.
Although the judicial system has now been sensitised to the abuse of the EAO system and the plight of the overburdened debtor, it does not affect the remedies available to a debtor to suspend, amend or rescind an existing EAO in terms of Section 65J of the Magistrate’s Court Act.
Section 65J(7) states:
“Any emoluments attachment order may at any time and on good cause shown be suspended, amended or rescinded by the court, and when suspending any such order the court may impose such conditions as it may deem just and reasonable.” (emphasis added)
This means that an existing EAO can be individually challenged by way of an application to court and there are no set time frames within which to bring such application. Before bringing such an application it is important to note what the court may deem as ‘good cause shown’. Taking into account the latest ruling of our Constitutional Court, the court will generally deem the following, although not exhaustive, as being ‘good cause shown’ to suspend, amend or rescind an EAO:
1. If the court where the EAO was granted is not situated within the local jurisdiction where you live or work;
2. If the order was implemented with the wrong outstanding balance or deducts an instalment higher than what you consented to;
3. If you are over-indebted and cannot reasonably support yourself or your dependants; or
4. If the order was obtained in a fraudulent manner i.e. without your consent or proper knowledge.
In considering the application and the relief to be granted, it should be noted that the court is not forced to rescind (remove) an EAO. The court will look at the relevant circumstances and make an appropriate order. For example, the court can decide to amend the EAO so that a smaller instalment is deducted from your salary. The court can also, for example, decide that deductions will be suspended for a set period of time – whereafter the order will be re-implemented. This all depends on your specific circumstances and what the court deems as appropriate in the circumstances.
It is very important to note that Section 65J(7) does not allow you the opportunity to challenge the original judgment on which the EAO was granted – it only grants you the power to specifically challenge the EAO. This means that even if you are successful in rescinding an EAO order – the original judgment (debt) will not be automatically rescinded (written off). It is only the manner of repaying that debt that may change.
Despite the greater relief and consideration afforded to a debtor through the recent court judgement, it is still advisable to seek the help of a legal specialist to consider any current EAO’s and whether grounds exist to challenge such EAO for suspension, amendment or rescission.