Difference between revisions of "Introduction to Creditors' Remedies (10:I)"

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{{REVIEWED LSLAP | date= July 8, 2023}}
{{LSLAP Manual TOC|expanded = creditors}}
{{LSLAP Manual TOC|expanded = creditors}}


== A. Governing Legislation ==
There are legal remedies available to creditors to enforce a debt, but the related procedures are frequently time-consuming and potentially costly, and there is no guarantee that the creditor will actually receive all of the funds owed.  The most important reason for starting civil proceedings to collect a debt is to permit the creditor to execute on their judgment.  Such execution proceedings may include:
#Examinations in aid of execution (to determine the debtor’s ability to pay the debt);
#Subpoena to debtor hearing (to obtain a court order compelling the debtor to make payments on the judgment);
#Garnishment (to compel third parties, such as banks and employers, to pay funds into court to the credit of the judgment rather than pay those funds to the debtor. See “Garnishment” at page 12); and
#Collection by execution (to lodge a writ of execution with the bailiff who will then seize and sell the debtor’s assets and pay proceeds to the credit of the judgment).


''Bankruptcy and Insolvency Act'', RSC. 1985, c. B-3 as am. by SC 1992, c 27 and SC 1997, c 12.  
A judgment may also be filed on the title of real property owned by the debtor and will remain on the title of that property for two years unless it is renewed, discharged (by the debt being paid or bankruptcy), or the creditor commences proceedings to sell the property and apply the proceeds of the sale against the debt.


''Builders Lien Act'', SBC 1997, c 45.  
Depending on the amount claimed, the matter will fall under the jurisdiction of the Civil Resolution Tribunal (under $5,000), Small Claims Court ($5,001 to $35,000) or the Supreme Court of British Columbia (above $35,000).  


''Business Practices and Consumer Protection Act'', SBC 2004, c 2.
Most of this chapter relates to the Supreme Court of British Columbia process. However, similar principles apply to Small Claims Court.
The Small Claims Court provides a detailed guide for creditors on enforcement procedures available under the Small Claims Court processes. See: https://www2.gov.bc.ca/gov/content/justice/courthouse-services/small-claims/how-to-guides/getting-results.


''Business Practices and Consumer Protection Authority Act'', SBC 2004, c 2.
The applicability of the information within this chapter is limited in situations where property is subject to the ''Indian Act'', RSC. 1985, cI-5.


''Court Order Enforcement Act'', RSBC 1996, c 78.
Finally, the Civil Resolutions Tribunal is designed for self-represented litigants and has rules generally preventing legal professionals from representing litigants in tribunal claims. Therefore, LSLAP rarely represents clients with Civil Resolution Tribunal claims


''Creditor Assistance Act'', RSBC 1996, c 83.  
'''NOTE:''' For regulations regarding High-Cost Loans and Credit products under the Business Practices and Consumer Protection Act [BPCPA], refer to Chapter 11: Consumer Protection.


''Family Maintenance Enforcement Act'', RSBC 1996, c 127
{{LSLAP Manual Navbox|type=chapters8-14}}
 
''Interest Act'', RSC. 1985, c I-18.
 
''Limitation Act'', SBC 2012 c 13
 
''Personal Property Security Act'', RSBC 1996, c 359.
 
''Pension Benefits Standards Act'', RSBC 1996, c 352.
 
''Repairers Lien Act'', RSBC 1996, c 404.
 
''Sale of Goods Act'', RSBC 1996, c 410
 
''Wage Earner Protection Program Act'', SC 2005, c 47, s 1.
 
''Warehouse Lien Act'', RSBC 1996, c 480
 
''Winding-up and Restructuring Act'', RSC 1996, c 6.
 
While matters involving bankruptcy or insolvency should almost always be referred to an insolvency practitioner, students offering advice in  this area should ensure that the advice is up-to-date in accordance with the applicable insolvency legislation. Always refer to the legislation directly. Given the number of applicable statutes and regulations, the law in this area is frequently subject to change.
 
== B. Introduction to Creditors’ Remedies ==
 
There are legal remedies available to creditors to enforce a debt, but the related procedures are frequently time-consuming and potentially costly, and there is no guarantee that the creditor will actually receive all of the funds owed. The most important reason for starting civil proceedings to collect a debt is to permitthe creditor to execute on their judgment. Such execution proceedings may include:
#examinations in aid of execution (to determine the debtor’s ability to pay the debt);
#subpoena to debtor hearing (to obtain a court order compelling the debtor to make payments on the judgment);
#garnishment (to compel third parties to pay funds into court to the credit of the judgment rather than pay those funds to the debtor); and
#collection by execution (to lodge a writ of execution with the bailiff who will then seize and sell the debtor’s assets and pay proceeds to the credit of the judgment).
 
A judgment may also be filed on the title of real property owned by the debtor and will remain on the title of that property for two years unless it is discharged by the debt being paid or bankruptcy, or the creditor commences execution proceedings against the land.
 
Before giving advice to creditors, a student should ask a number of questions. The first is whether the good is a secured interest, and, if so, whether it is a consumer good. If the debt is unsecured, a charge cannot be registered against the property, unless the property is the  subject matter of the dispute. However, after a judgment is obtained a charge can be registered against any property owned by the judgment  debtor. Although LSLAP helps comparatively few creditors, this half of the chapter should answer most questions for matters that LSLAP '''may''' be able to help with.

Latest revision as of 17:52, 8 August 2023

This information applies to British Columbia, Canada. Last reviewed for legal accuracy by the Law Students' Legal Advice Program on July 8, 2023.



There are legal remedies available to creditors to enforce a debt, but the related procedures are frequently time-consuming and potentially costly, and there is no guarantee that the creditor will actually receive all of the funds owed. The most important reason for starting civil proceedings to collect a debt is to permit the creditor to execute on their judgment. Such execution proceedings may include:

  1. Examinations in aid of execution (to determine the debtor’s ability to pay the debt);
  2. Subpoena to debtor hearing (to obtain a court order compelling the debtor to make payments on the judgment);
  3. Garnishment (to compel third parties, such as banks and employers, to pay funds into court to the credit of the judgment rather than pay those funds to the debtor. See “Garnishment” at page 12); and
  4. Collection by execution (to lodge a writ of execution with the bailiff who will then seize and sell the debtor’s assets and pay proceeds to the credit of the judgment).

A judgment may also be filed on the title of real property owned by the debtor and will remain on the title of that property for two years unless it is renewed, discharged (by the debt being paid or bankruptcy), or the creditor commences proceedings to sell the property and apply the proceeds of the sale against the debt.

Depending on the amount claimed, the matter will fall under the jurisdiction of the Civil Resolution Tribunal (under $5,000), Small Claims Court ($5,001 to $35,000) or the Supreme Court of British Columbia (above $35,000).

Most of this chapter relates to the Supreme Court of British Columbia process. However, similar principles apply to Small Claims Court. The Small Claims Court provides a detailed guide for creditors on enforcement procedures available under the Small Claims Court processes. See: https://www2.gov.bc.ca/gov/content/justice/courthouse-services/small-claims/how-to-guides/getting-results.

The applicability of the information within this chapter is limited in situations where property is subject to the Indian Act, RSC. 1985, cI-5.

Finally, the Civil Resolutions Tribunal is designed for self-represented litigants and has rules generally preventing legal professionals from representing litigants in tribunal claims. Therefore, LSLAP rarely represents clients with Civil Resolution Tribunal claims

NOTE: For regulations regarding High-Cost Loans and Credit products under the Business Practices and Consumer Protection Act [BPCPA], refer to Chapter 11: Consumer Protection.

© Copyright 2023, The Greater Vancouver Law Students' Legal Advice Society.