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Unfortunately, for some it's just the beginning. Getting a court order is one thing, but getting your money, or whatever the judge says you're entitled to, is another matter. That's what this booklet is about. It will answer some questions about what happens after you've got your court order. And if you've lost your case and have to pay, it will tell you what some of your options are. If
I win my case, will the court collect my money for me? What
do I do once I have my order? After that, the first thing you should do is send a copy to the debtor with a letter asking for prompt payment. Be sure to include the address where payment may be made. Set a reasonable deadline, taking into account whether payment will likely come by mail, and other circumstances you may know about. If that doesn't work, you will have to take other steps to enforce your order. You have 10 years before the order expires, but usually, the faster you act, the better your results will be. But
I will eventually get my money won't I? On the other hand, trying to collect money from a person who is really determined not to pay, can be a losing battle. It can cost you more - in time and money - than the case is worth. Many people do want to pay their debts, especially if they are given time to do so. Others may be persuaded to pay if you are persistent in your use of the rules and procedures provided by the small claims court. What
happens after the payment order is made? After the payment order is made - whether at a settlement conference or at the end of the trial - the judge asks whether the debtor needs time to pay. If the answer is "Yes", the debtor will be asked to suggest a payment schedule. A person might say, for example, "I can pay that in 30 days." Or, "I could pay $100 on Friday and $200 a month until it's all paid." These are only examples. Whatever the proposal, it should be one that the debtor can handle, and that is reasonable from the creditor's point of view. The judge then asks whether the creditor agrees with the suggested schedule. If so, the judge will make the order, called the "payment schedule" in the terms proposed by the debtor. If not, the judge may:
What
can the creditor do if the debtor doesn't pay?
We will talk about each of these procedures in turn. The payment hearingWhat is the purpose of a payment hearing?The payment hearing gives both the court and the creditor information about the debtor's financial situation. It may be that the creditor will want to issue a garnishing order and needs to know where the debtor works or banks. Or it may be that the debtor wants to pay by instalments. In that case, the payment hearing gives the court the information needed to make the appropriate order. If the debtor's address is a post office box number, the creditor should find out at the payment hearing where the person can be found - in case a summons, for example, has to be served personally. It is likely a good idea for a creditor to try and find out as much as possible about a debtor's employment and bank accounts in case this information becomes necessary. Read about the other procedures in this booklet and come prepared to ask the debtor questions about his or her employment, about any motor vehicles or land owned by the debtor, and about all bank branches where the debtor has an account. Where it is appropriate you can also ask questions about a debtor's monthly income and expenses. There is a statement of finances form available from the registry that may be helpful. Debtors can be asked to confirm income or expenses by requesting them to bring such items as pay slips, credit card statements and their last income tax return. When is the payment hearing held?A payment hearing can be held at any time before the debt is paid in full.
How does a creditor ask for a payment hearing?If you are a creditor (that is, if you have a court order that someone must pay money to you), go to the registry or write and tell the registrar you want a payment hearing. The registrar will give you a summons to fill out and will then set a date for the hearing. After the summons is accepted for filing, you will have to personally serve or arrange for someone else to personally serve the person who is to come to the hearing. The notice must be served on the debtor at least seven days before the hearing and cannot be served outside of the province. If the debtor is a company, you will want the summons to name the person who has the information you need. You can name any director, officer or employee of the company. If the debtor is a partnership you can name any partner. Once service is done, the affidavit of service should be completed and be sworn so that it is ready to be shown to the judge if the debtor does not appear. How does a debtor ask for a payment hearing?If you are a debtor (that is, if a court order says you must pay money to someone), go to the registry or write a letter and tell the registrar you want a payment hearing. The registrar will give you a notice to fill out and will then give you a date for the hearing. The notice must be served on the creditor at least seven days before the hearing. It is recommended that you complete a statement of your monthly income and expenses; the form for this is available from the registry. Give the court and the creditor a copy of this form at the hearing. What if the creditor does not attend the hearing?If you are the creditor and you don't plan to go to the payment hearing, you should either send a representative or let the registry know by letter that you want the hearing to go ahead without you. The court can choose to hold the hearing in your absence, or to cancel or adjourn it. What if the debtor does not attend?If you are the debtor, you must attend the payment hearing. You can be arrested for not attending if you were served with a summons to attend, or if you were in court when the judge ordered you to attend. What if the debtor is not given time to pay?If there is no payment schedule, the full amount of the payment order is due immediately. As soon as the order is made, the creditor can file the order and then go ahead and enforce it. What if a payment schedule is ordered?If a payment schedule is ordered, the debtor is only obliged to make the payments in the amounts and on the dates ordered in the schedule. As long as those payments are made, the creditor cannot do anything else to enforce the order. But if the
debtor fails
to make a payment - or makes only a partial payment - the
whole amount of the order becomes due immediately.
Can
a payment schedule ever be changed?
GarnishmentWhat is it?If you have a judgment (a court order) requiring someone to pay you money, the law provides you with a tool called "garnishment" to use if the debtor does not pay. Garnishment is a way of getting your hands on money that someone else owes to the debtor, before it goes to the debtor. Most often,
people garnish wages or bank accounts.
Because this is quite a drastic measure, the rules are very strict and you have to follow them exactly. The rules for garnishment are actually contained in the Court Order Enforcement Act and they apply to enforcement of judgments from any court. How do I do it?The procedure in a typical case is this: 1. You prepare an affidavit in support of a garnishing order after judgment. This form tells: a) the details of the court order you are enforcing b) the amount still owing c) that someone else (the garnishee) owes money to the debtor d) that the garnishee is in British Columbia, and e) the address of the garnishee. 2. You fill out a garnishing order. 3. You file the affidavit and garnishing order in the court registry. There is a fee for having someone in the registry swear the affidavit and there is a fee for filing the garnishing order. The registrar inserts the amount of costs you may be allowed to collect, signs the order and gives back to you the copies you will need for service. 4. You serve the garnishing order on the garnishee (that is, the bank, or the employer, or whoever you have named in the order). 5. The garnishee pays the money to the court (if there is any money). 6. If there is any money paid into court you serve the garnishing order on the debtor and file an affidavit of service. All the rules have to be carefully followed. For example, if you don't have the name of the garnishee exactly right, the garnishee can legitimately ignore the order. If you are garnishing a bank account, you have to know the branch where the debtor banks. A joint account cannot be garnished. If you are garnishing wages, you must know the correct legal name of the employer, the address and the pay date. The date on which the affidavit is sworn must be within seven days before the pay date. You can serve the documents on the garnishee and the debtor either personally or by "registered" mail. If the documents are served by registered mail, be sure to obtain a proof of service by either phoning toll free 1-888-550-6333 and asking for a signature copy or accessing the Canada Post Internet site at www.canadapost.ca and printing the delivery confirmation form. The usual practice is to serve the garnishee first (so that the debtor doesn't remove the funds) and then serve the debtor if money is paid into court. Unfortunately the garnishing procedure is a one-time measure that attaches only the money that is in the bank account when it is served or that is owed to the employee within seven days of when the affidavit in support of the garnishing order was sworn. If you want to repeat the procedure you have to obtain a new garnishing order and go through all the steps again. How do I get the money, once it's been paid into court?There are three possibilities:
Do I get back my expenses?When
you present your garnishing order for filing at the court, the
registrar will estimate the amount of expense that will be allowed.
Can all of a person's earnings be garnished?No.
The law provides for certain exemptions, depending on the debtor's
circumstances. In most cases, 30 per cent of net wages or salary,
after the normal payroll deductions, can be garnished.
Employment insurance and social assistance payment cannot be garnished, but there are no exemptions for money that is sitting in a bank account. What
can I do if my money is being garnished? If the garnishment means a real financial hardship for you, you can ask the court or registrar to cancel the garnishing order and return the money. If that happens, a payment schedule will be ordered. You can also ask a judge to increase the amount of your wages that is exempt from garnishment - up to 90 per cent of the net amount. Seizure
and sale of the debtor's good What may be seized?Under
the Court Order Enforcement Act, a debtor is entitled
to the following exemptions of personal property:
A debtor is also allowed to retain all necessary clothing and required medical aids for himself or herself or for a dependent. A debtor may choose any goods which he or she would like to exempt from seizure and sale up to the maximum allowable amount within each category. A debtor has two days to chose which goods he or she would like to exempt from seizure. In addition, you may not seize anything that the debtor owns jointly with someone else. This often means that household goods, for example, cannot be taken. The most common items to be seized are motor vehicles and shares in a company, although any goods that are worth taking and are not part of the exemption can be seized. You can find out or confirm what motor vehicles a debtor owns by sending a copy of the judgment to:
There
is a fee for this service. For more information call (604)661-2233
or 1-800-464-5050. Alternatively, a legal search service can
be used, but the fees will be higher. The
search on personal property can be conducted at your local Government
Agent office, Motor Licensing office or at:
For
further information on the Personal Property Registry including
the fee for the search, contact (250) 356-8600.
What is the procedure? Go to the court registry and tell the registrar you want an order for seizure and sale. You will be given forms to complete and return. The registrar will advise you to review the list of authorized court bailiffs and choose a court bailiff. The registrar will issue the order and forward the original order to the court bailiff and will give you copies of the order. Be prepared to give the court bailiff copies of the information you received from ICBC and the Personal Property Registry, along with a letter setting out any other information about the debtor's goods that will assist. You will be asked to pay a deposit to the court bailiff to cover the estimated amount of time it will take the court bailiff to do the job. What does the court bailiff do?The court bailiff must inform debtors of their exemption rights under the Court Order Enforcement Act when he or she first visit the debtor's home. The court bailiff will look into what assets might be seized. The debtor will be given the chance to pay the amount due at the time of seizure. If the debtor has an ability to pay, the presence of the court bailiff is sometimes an effective measure. If not, any goods worth seizing that are not part of the exemptions may be taken away and later sold by auction, sealed bid or other similar acceptable means. Since the proceeds are used to pay the court bailiff's costs first, the goods need to have sufficient value at an auction to pay the court bailiff's final fee, and the various charges for such items as towing, carting, storage and advertising. If the goods do not have enough value to pay these costs with at least some amount left over for the creditor, they are not worth seizing. The court bailiff will return the original order for seizure and sale to the registry, with a notation explaining the outcome. If the procedure is not successful, you may not be able to get the costs you have paid to the court bailiff from the debtor.
Default
hearings
If a payment schedule was made after a trial or settlement conference, or following a payment hearing, and the debtor has not lived up to its terms, you can ask for a default hearing. To do that, you fill out a summons to a default hearing and submit it to the registrar. It will be served on the debtor by a sheriff or bailiff at least seven days before the hearing. What happens at a default hearing?The judge will ask the debtor why the payments were not made. After listening to the debtor and the creditor, the judge can change the terms of the payment schedule or confirm the terms as they stand. If the judge decides that the debtor's explanation for not paying shows contempt of court, the judge can order the debtor to be jailed for up to 20 days. If that happens, the debtor still owes the money, even after going to jail. A debtor who does not show up for a default hearing can be arrested if the person was properly notified. Registration
against land Then take this certificate to the land title office where the land is. Land Title office staff will assist with the title search in order to collect the necessary information for you to complete the forms required for registration in the Land Title office. A registration fee will apply. You can register one judgment against more than one property, if you wish. If the property is owned in joint tenancy with someone else (as is often the case, especially if it is a family home) you can still register your judgment against it, but if the debtor dies, the registration is cancelled. Do I have to wait for the debtor to decide to sell?No. You can ask the Supreme Court to force a sale of the property. But this is a complicated and costly process and is not often used to enforce a small claims judgment. You should get legal advice if you are thinking about applying for sale of land. How long does the registration last?The registration is good for two years and can be renewed every two years. If you keep renewing the registration for up to 10 years, there is a greater likelihood that the debtor may sell or re-mortgage the land and you will be paid. You must remember to renew the registration before the two years are up and the earlier registration expires. Once the registration has expired, you will have to obtain a new certificate from the registry and you will have lost your place on the title. Summary In most cases, you should start with a simple written request for payment along with a copy of the order. If that doesn't work, take a look at all the information you have about the debtor and try to decide what would be the most effective method. Usually a payment hearing is a good start because you can use that to gather the information you may need later. A payment schedule is often the answer - if timing and amount of the payments are manageable for the debtor, you have a better chance of collecting what's owing to you. But if the debtor has money available and is just determined not to pay, take a look at the other options we have discussed and decide what will give you the best chance of success. How
can I get more information? The titles in the series are: #1
WHAT IS SMALL CLAIMS
COURT? CIVIL RULES - For more detailed information you may want to look at the small claims court rules themselves. The rules have been written for non-lawyers. The people behind the counter at any small claims registry are helpful. They cannot give legal advice and they cannot fill out your forms for your, but they will gladly answer many of your questions about small claims court procedures.
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Updated: December 6, 2007 |
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