Garnishee orders? Use your bonus to free up your salary in 2012

Thousands of consumers are looking forward to receiving their bonuses and have long lists of items that they intend to purchase with their well deserved cash. What many don’t do is look at paying off those nagging garnishee orders that their payroll departments have been diligently taking off their salaries for months, if not years.

‘The nature of garnishee orders is that small amounts are deducted on a monthly basis and this does not do much for decreasing the debt speedily,’ says Credit Ombud Manie van Schalkwyk. After paying the garnishee for years, you may find that you still owe as much, if not more than the original debt that you owed at the time when the garnishee was instituted, he adds.

Most people in the credit industry are, rightfully so, advising consumers to pay off expensive debt such as credit cards and personal loans first when they receive their bonuses. The older debt, which will often be deducted from consumers’ salaries through garnishee orders, is often forgotten. ‘By actually settling garnishee orders through one big payment, consumers free up their salary, making for an increase in disposable income.  Freeing your salary will assist to get you out of the debt trap faster,’ he explains.

Studies done earlier in the year show that over 100 000 government employees in just four of the nine provinces and 18 of the 34 national departments had more than R45-million docked from their salaries in garnishee orders in just one month.

By making one big payment on the garnishee order consumers can save years worth of additional costs. Garnishee orders not only collect the outstanding amount of the principle debt that the consumer owed, but also include additional costs that are added to the principle debt amount. These include monthly interest, legal fees and a 10 percent collection commission that is deducted from every payment made.

‘Even if consumers don’t manage to pay off the entire amount that is outstanding, they can save themselves thousands in the long run and significantly cut the number of years that the garnishee will be deducted from their salaries,’ adds van Schalkwyk.

In this festive season period, many consumers don’t even think about making financial plans for the new year.  In order to avoid financial blues in the coming year, van Schalkwyk advises consumers to use the following January ‘survival kit’:

•-          Use a portion of your bonus to pay your municipal bill in advance for January

•-          Buy school uniforms and stationary now already

•-          Buy non-perishable groceries while they are on special during the festive season

•-          Pay school fees upfront

•-          Pay off debt or settle the outstanding amounts on your garnishee orders

Consumers can contact the Credit Ombud on 0861 66 28 37 or visit for more information on credit related matters.