Legal Definitions - garnishee

A garnishee is a third party who holds money or property belonging to someone else (the debtor) and is legally required by a court order to withhold or turn over those assets to a creditor. Essentially, the garnishee is an impartial party caught in the middle of a legal dispute between a debtor and a creditor, tasked by the court to ensure the creditor receives what they are owed from the debtor's assets held by the garnishee.

Here are some examples to illustrate the role of a garnishee:

• Example 1: Wage Garnishment

  A software development company employs a programmer who has an outstanding debt for medical bills. After the medical provider (creditor) obtains a court judgment against the programmer (debtor), the court issues an order requiring the software company to deduct a portion of the programmer's bi-weekly paycheck and send it directly to the medical provider until the debt is paid. In this scenario, the software development company is the garnishee because it holds the programmer's wages and is legally obligated by the court to redirect a portion of those funds to the creditor.

• Example 2: Bank Account Garnishment

  A small business owner defaults on a loan from a commercial lender. The lender (creditor) sues the business owner (debtor) and wins a judgment. The court then orders the local bank where the business owner holds their checking account to freeze a specific amount of funds in that account and transfer them to the commercial lender. Here, the local bank acts as the garnishee. It controls the debtor's funds and must comply with the court's directive to release those funds to the creditor.

• Example 3: Rental Income Garnishment

  A property management company collects monthly rent from tenants on behalf of a landlord. The landlord, however, owes a significant amount to a contractor for recent renovations. After the contractor (creditor) secures a court judgment against the landlord (debtor), the court might order the property management company to pay the landlord's share of the collected rent directly to the contractor instead of the landlord until the debt is satisfied. In this case, the property management company is the garnishee because it holds money (rental income) belonging to the debtor and is legally compelled to divert it to the landlord's creditor.