A Creditor’s Guide To Garnishee Orders In Malaysia

For creditors in Malaysia with a court judgment in their favour, a garnishee order is one of several enforcement options available when a debtor continues to fail to pay.

Specifically, it allows a creditor to directly collect (or ‘garnish’) money by third parties that the debtor has receivables from such as clients, tenants, and banks.

While the facts of each case should always guide the choice of payment enforcement method, our professional experience has taught us that garnishee orders are among the fastest and most effective options available when used under the right circumstances.

For creditors in Malaysia contemplating legal action against debtors, below we outline how Rule & Co can help you obtain a garnishee order and ultimately recover what’s owed.

Of course, readers are welcome to skip the guide and reach out for a free recovery assessment!

Otherwise, let’s begin.

Procedure overview 

Depending on case complexity as well as the courts’ scheduling and backlogs, a typical garnishee order application can take anywhere from a few weeks to months; and consists of three main stages: 

1. Obtain Garnishee Order to Show Cause
2. Inter-parte hearing, and
3. Secure Garnishee Order Absolute

For clarity, in the sections below, we refer to the reader as the judgment creditor, the debtor as the judgment debtor, and third parties as garnishees.

Stage 1: Obtain Garnishee Order to Show Cause (ex parte)

The first step is to identify potential garnishees who may hold money for your judgment debtor and any possible objections either party might raise against a garnishee order. 

If we determine that there is merit in proceeding, we will—with your approval—file an ex parte application for a Garnishee Order to Show Cause, meaning it is made without notifying the judgment debtor or potential garnishees.

If granted, a Garnishee Order to Show Cause accomplishes two key things: 

1. Freezes any funds held by the garnishee for the judgment debtor, and
2. Requires the garnishee to appear before the court to confirm if such funds exist

This ensures the debtor cannot move or conceal funds before the court can act, and with garnishees now required to appear in court, we proceed to the next stage.

Stage 2: Inter-parte hearing

All parties appear in court and the garnishees must disclose what they owe to the judgment debtor, or in the case of banks, how much they hold in the debtor’s accounts. Our goal is to obtain a Garnishee Order Absolute compelling a garnishee to pay directly to you. 

Objections may be raised to prevent this, namely that:

• the garnishee does not owe the debtor any money
• the debt or funds are not yet due
• the debt is disputed or subject to another claim, or
• the funds are held in a joint capacity

We address all objections and if needed, present evidence the funds / debt in question belongs to your judgment debtor. This is why we only proceed to this stage if confident neither the garnishee nor judgement debtor has valid reasons!

If the court is satisfied, it may then issue a Garnishee Order Absolute.

Stage 3: Secure Garnishee Order Absolute

This is the final order directing the garnishee to pay you directly. 

Depending on the type of garnishee and the nature of money owed, compliance cannot be taken for granted. In cases where the garnishment is an ongoing process, our role now is to ensure continuous compliance with the court’s order, and failing that, take further enforcement steps.

When to use a garnishee order

A garnishee order is most effective under two conditions: 

1. The judgment debtor has cash funds or receivables held by third parties
2. The third parties are financially capable of complying with the court order

The classic, typical example is when the judgment debtor maintains an account with a bank. In such cases, garnishee orders can be faster and less confrontational than seizing physical assets or initiating bankruptcy or winding-up proceedings.

This is why we always conduct preliminary research, and in some cases, recommend starting with a judgment debtor summons (JDS) to force a judgment debtor to disclose their sources of income and assets.

When other enforcement methods might be better

For the sake of argument, should investigations reveal the judgement debtor:

• does not have any known bank accounts or potential garnishees, or
• primarily stores their wealth in physical assets (e.g. land)
• owes multiple creditors in addition to you

Alternative enforcement routes may be better, namely a writ of seizure and sale to seize and auction the debtor’s property, or even bankruptcy / winding-up proceedings to ensure equitable recovery.

And of course, if a judgement debtor is willing to negotiate, we are firm advocates (literally and figuratively) of out of court settlements at any stage of the process; with necessary safeguards in place.

Consideration of legal fees

For readers contemplating a civil suit, keep in mind that some cases can drag on for years, and easily cost tens to hundreds of thousands of Ringgit.  

Even if the debt value justifies the expense, pre-trial negotiations are almost always far more cost-effective, and we invite you to get in touch for a free debt recovery assessment with our legal team to explore your best options.

That’s it from us, and we wish you a smooth debt recovery!

Let Rule & Co secure your garnishee order

If you’ve sent reminders and been ignored or simply don’t want the hassle of chasing payments, Rule & Co is a debt recovery law firm that focuses on helping creditors recover debts through  legal strategies that minimize upfront cost and maximise recovery while protecting your reputation.