Garnishment as an Enforcement Tool for the Creditor and the Debtor’s Defense
Garnishment in the hands of a third party is the most common form of enforcement in Greece, particularly when it involves freezing (compulsory or precautionary) bank accounts. The third party is usually a bank, but in principle it can be any debtor of the judgment debtor – that is, anyone who owes money to the main debtor.
Freezing funds in a bank account is a powerful tool for the creditor, as it directly affects the debtor’s liquidity and business operations. This allows the creditor to secure payment quickly and effectively. On the other hand, the debtor often sees his financial activity paralyzed, which forces him to react.
Below we present the process from both perspectives: the creditor’s actions and the debtor’s defenses.
Enforceable Title: The Precondition for Garnishment
To initiate compulsory garnishment, the creditor must hold an enforceable title – for example, a court judgment, a payment order, or a notarial deed with enforceability.
Without such a title, there can be no enforcement. In practice, creditors often begin with a payment order, which provides a fast-track way to move against the debtor’s bank accounts.
Example: A supplier obtains a payment order for an unpaid invoice of €50,000. With this document, he can proceed to garnish the debtor’s bank accounts.
The Garnishment Writ
The garnishment writ is the document that triggers the process. It is served both to the bank and to the debtor, and it must state:
- the amount of the claim,
- the enforceable title,
- the order to the bank to freeze funds,
- the details of the debtor.
Once served, the funds in the debtor’s accounts are frozen up to the claimed amount. The debtor cannot withdraw them, while the bank is obliged to hold them.
Duties and Liability of the Third Party
The bank must respond with a third-party declaration within 8 days, indicating whether funds exist and in what amount.
- If it confirms, the procedure continues.
- If it fails to respond or makes a false declaration, it may be held liable to the creditor.
Consequences for the Debtor
The impact of garnishment is immediate:
- frozen bank accounts,
- inability to meet obligations,
- disruption of business transactions,
- damage to credibility.
The measure is strict, but precisely for this reason it is effective. In many cases, freezing a bank account pushes the debtor towards settlement.
Precautionary Garnishmen
Under Article 724 of the Greek Code of Civil Procedure, the creditor may seek precautionary garnishment even before a final judgment is issued or before the debtor is informed. This is a preventive measure to ensure that funds are not transferred or hidden before the case is decided.
Example: A supplier with a payment order for €50,000 can serve a precautionary garnishment on the debtor’s bank accounts even before the debtor becomes aware of the payment order, thereby immediately freezing the accounts.
Precautionary garnishment may also be imposed within the framework of interim relief proceedings.
B. The Debtor’s Defense
Objection (Annulment Action)
Within the statutory time limits after service, the debtor may file an objection (ανακοπή). Grounds may include:
- the claim does not exist or has already been paid,
- the garnishment writ is invalid,
- the garnishment is abusive or disproportionate.
Thus, the objection is the debtor’s primary tool to contest the enforcement.
Application for Suspension – Temporary Relief
Until the objection is decided, the debtor may request a suspension of enforcement to mitigate the consequences of the garnishment. The court will grant suspension if it is convinced that irreparable harm would otherwise occur (e.g., business closure).
If granted, enforcement is “frozen” until the court rules on the objection, giving the debtor valuable time to prepare his defense strategy.
Revocation or Restriction of Precautionary Garnishment
The debtor may request revocation or restriction of the precautionary garnishment when the measure is disproportionate or circumstances have changed – for example, if the garnishment covers more accounts than necessary compared to the amount of the claim, or if part of the debt has already been repaid.
The court may lift the garnishment entirely or restrict it to achieve a balance between the creditor’s protection and the debtor’s ability to continue economic activity.
Practical Impact and Strategy
Garnishment of bank accounts has both legal and practical implications:
- salaries remain unpaid,
- contracts collapse,
- families face financial hardship.
The debtor’s strategy must therefore be immediate and well-planned, combining the appropriate remedies with the strongest possible arguments for annulment or suspension.
Conclusion
Garnishment in the hands of a third party is a powerful weapon for creditors but also a serious threat for debtors:
- The creditor must act swiftly and precisely.
- The debtor must respond quickly with objection and suspension measures.
At Papatriantafyllou & Thanasenari, we have extensive experience in handling garnishment cases, acting both for creditors and for debtors. Our expertise in business litigation and enforcement enables us to provide strategic and practical guidance, ensuring the maximum possible protection of our clients’ rights and interests.
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- Seizure of a Limited Partner’s Property & Seizure of Shares in a Public Limited Company
Disclaimer: This publication is intended for informational purposes only and does not constitute legal advice. Professional legal guidance should always be sought before acting on any information contained herein.