Collecting on a Judgment
When you have a debt claim, a first major consideration is obviously how you can collect the amount you are owed cost-effectively. Generally, if a debtor is not paying you voluntarily, then you will need to obtain a judgment from a British Columbia Court or a judgment from another jurisdiction as a first step. For a judgment from a foreign jurisdiction, even another province, that judgment will need to be properly registered with the BC Courts before you will be in a position to take any steps to collect on that judgment in BC. For the purposes of this discussion, we will assume that you have a valid judgment registered with either the Supreme Court or the Provincial Court in British Columbia.
Once you have a Court judgment registered in BC, then you need to locate income or assets in BC in the name of the judgment debtor. If you know where the judgment debtor works, then you can apply for a garnishing order from the Court and serve it on the debtor’s employer and the debtor. You can also garnish funds due and owing to the debtor by a person or corporation that is not an employer. In order to garnish a debtor’s bank account, you will need to know which branch of which financial institution the debtor has their account, as well as when the debtor actually has a positive balance in the account. You cannot garnish a line of credit or overdraft. If there are funds due and owing to the debtor when the order is served, then the funds will generally be paid into Court and you will then be able to apply to have the funds paid out of Court to you.
Another possible avenue for collecting on a judgment can be seizing and selling an asset. The issue in many cases will be locating assets in which the debtor has equity. It is often worthwhile to conduct a search in the personal property registry (“PPR”) in the debtor’s name. In addition to a PPR search, a creditor with a judgment in BC can conduct a vehicle registration search with ICBC to see if the debtor has any vehicles registered in his/her name in BC. In order to conduct this search with ICBC, you will need to know the debtor’s full legal name, address and date of birth. If an asset that is owned by the debtor has a security interest which is properly registered in the PPR against the asset, then that secured creditor will need to be paid out in priority to your judgment. Of course, you would not generally want to seize and sell an asset if somebody else is going to get all the net proceeds from the sale. Personal property that can be seized and sold to collect a judgment can include vehicles, shares in a BC corporation, jewelry, tools (with some restrictions) and recreational property.
Real property can also be a source for collecting on a judgment. Real property is commonly thought of as land and buildings. A search of the debtor’s name at the BC Land Titles Office will show if there is property registered in the name of the debtor in BC. Registration of a judgment on property can limit the ability of the debtor to sell or refinance the property until such time as the judgment has been discharged by you or by a Court order. If there are mortgages registered against the property, the mortgage holder will be paid in priority to a subsequently registered judgment.
If you have a judgment, but do not know of any assets or income to collect against, then there are procedures to examine a debtor about his/her ability to pay. If your judgment is from the BC Supreme Court, then you can conduct an examination in aid or execution and compel the debtor to answer questions under oath about the debtor’s assets, income, liabilities and expenses. For Provincial Court judgments, you can require the debtor to answer questions about their financial situation and ability to pay the judgment.
Of course, you cannot collect money from someone that does not have any assets or income. It will typically be worthwhile to think about your ability to collect a judgment at an early stage, even prior to obtaining judgment. Enforcing a judgment can be a difficult process with some debtors. It is a trite saying that “you can’t get blood from a stone” and seeking the advice and assistance of a lawyer at an early stage can help you to make an informed decision about whether your efforts are likely to be productive.