Getting Your Judgment Paid

Unfortunately, obtaining a Small Claims Court judgment – whether at the end of a trial or settlement conference, or by default – does not guarantee you will get paid immediately. What can you do if the person you sued refuses to pay your judgment? This script discusses your options by explaining how you, known as the “creditor” following a judgment in your favour, can pursue the defendant, after judgment known as the “debtor”, to obtain the money you have been awarded.

“File” your court judgment

After the judge has made a Payment Order at the end of your trial or settlement conference, you must go to the Small Claims Court registry and fill in a Payment Order form (Form 10). This form will be signed by the appropriate person and “filed” or entered in the court records.

If the defendant did not respond to your claim within the necessary timeframe, you must instead complete an Application for a Default Order (Form 5).

A Small Claims Court judgment is valid for 10 years, meaning any action you take to get your judgment paid must be completed within that time period. A Small Claims Court judgment cannot be renewed beyond the 10-year period, but it can be extended for another 10 years if:

• the debtor confirms the cause of action; or
• you start a new court action based on the previous judgment before the original 10 years are up.

Write and ask the debtor to pay you

After filing your payment order or default order, you should consider sending a copy to the debtor with a letter asking the debtor to pay you. The letter should be brief and informative, warning that further action will be taken if payment isn’t received by a certain date. Set a reasonable deadline (for example, within 14 days from the date of the letter’s sending), and be sure to include the address where the payment can be made. It’s a good idea to send the letter by registered mail.

What is the procedure for a Payment Schedule?

A Payment Order might include a Payment Schedule, which tells how often and how much the debtor must pay to satisfy the amount awarded in the judgment. As long as the debtor makes the payments according to the schedule, you can’t take any steps to collect the full amount all at once. However, if there’s no payment schedule included in the Order or if the debtor doesn’t pay according to the schedule, the debtor will owe the full amount immediately and you may take the steps needed to collect it.

What is a Default Order?

A Default Order can be sought from the court if the defendant in a case fails to respond to your notice of claim within the allotted time. Where this occurs and where the amount claimed is a specific, easily-calculable debt, a judge can make an order in your favour allowing you to begin the process of collecting it immediately. The Default Order will require that the debtor pay the amount claimed plus interest and expenses.

If your claim is not for a debt in a specific amount, a hearing before a judge will first be set to determine how much your judgment should be. Be aware that a Default Order isn’t automatic, and you must be prepared to give evidence and show supporting documents to prove the amount owing.

What can you do if the debtor doesn’t pay?

If the debtor doesn’t pay your Payment Order or Default Order, you have five options, discussed in detail below:

1. a Payment Hearing
2. seizure and sale of goods by the court bailiff
3. garnishing the debtor’s wages or bank accounts
4. a Default Hearing (if the debtor doesn’t obey a Payment Schedule)
5. registration against land

Option 1: a Payment Hearing

The purpose of a Payment Hearing is to find out information about the debtor’s financial situation. At the hearing, the debtor can be required to produce income tax returns, recent pay stubs and other documents that show their assets, income, and debts. At the Payment Hearing, the judge considers the debtor’s ability to pay the payment order, and whether a payment schedule should be included.

When attending a Payment Hearing, be prepared to question the debtor about his or her employment, bank accounts, and other assets and sources of income. You can use the information gained at the Payment Hearing to help collect on your judgment, and the costs of your application for the Payment Hearing will be added onto the amount the debtor has to pay you.

If the debtor doesn’t attend the Payment Hearing, you can ask the judge to issue an arrest warrant, compelling the debtor to attend.

Option 2: seizure and sale of goods

An order for seizure and sale of goods allows a court bailiff to take and sell the debtor’s property. This option can be especially helpful where the debtor doesn’t appear to have any cash income but has valuable assets, such as an expensive car, a boat, or shares in a profitable company.

Before proceeding, however, note that the Court Order Enforcement Act of BC allows a debtor to keep the following:

• $4,000 of household furnishings and appliances,
• A vehicle worth up to $5,000; and
• $10,000 worth of tools and other personal property that the debtor uses to earn income for work.

Also, the bailiff will be paid first from the sale of the goods, meaning you must be certain that the debtor has goods worth taking and selling at a court-ordered auction.

A helpful tip for when executing on an order for the seizure and sale of goods is to give a copy of the Payment Order or the Default Order to the Insurance Corporation of British Columbia (ICBC) to see if the debtor has any motor vehicles registered to his or her name. Likewise, you can also search the debtor’s name in the BC Manufactured Home Registry or the Personal Property Registry to see if the debtor is the registered owner of any personal property that could be seized and sold, if their value is more than the above exclusions.

If you decide to seek an Order for Seizure and Sale, be mindful that you will need to pay a deposit to cover the bailiff’s estimated costs.

Also, be aware that an Order for Seizure and Sale is valid for one year.

A related option is to ask a bailiff to perform a search of the court’s records to see if any other creditors are trying to recover against the same debtor. If there are active collection efforts underway by other creditors, you may be able to share in some of the recovery from the debtor. Also be aware that some creditors, including Revenue Canada, may have priority over assets.

Option 3: garnishment

A Garnishing Order, once obtained from the court, can be presented to the debtor’s employer or the branch of the bank where the debtor has an account, and the wages owed or bank money belonging to the debtor will be paid to the court instead. Once the court receives the money, you can apply to have it paid out to you.

Note that generally only 30% of a debtor’s wages can be garnished. There are also some technical rules and the steps have to be followed properly, so discuss the procedure with the registry staff before beginning with the garnishment process.

For more information on garnishment, refer to Dial-A-Law script 251 on “Garnishment”.

Option 4: a Default Hearing

The purpose of a Default Hearing is for the court to determine why a debtor has not made payments previously ordered by that court, including at trial, in a settlement conference, or following a Payment Hearing.

At the hearing, the debtor must explain to a judge why he or she hasn’t obeyed the Payment Schedule. The judge can either confirm the original Payment Schedule or change the terms. If the judge decides that the debtor’s explanation for not paying shows contempt of court, the judge can send the debtor to jail for up to 20 days, and the debtor must still pay the money.

At a Default Hearing you are responsible for setting out what items the debtor must bring before the court, including banking records, tax returns, utility bills and credit card statements. If the debtor fails to attend the Default Hearing, you can ask the judge to issue an arrest warrant.

Option 5: registration against land

You can register your Payment Order against any land owned by the debtor in British Columbia. This will severely restrict the debtor’s ability to sell or mortgage the land until the judgment is paid. To find out if the debtor owns land in the province, you can conduct a name search at the Land Title Office through BC OnLine at www.bconline.gov.bc.ca.

To register your payment order, you must get a certificate of judgment from the Small Claims Court registry and file it with the Land Titles Office that holds the records of the debtor’s real property holdings. The registration is good for two years, and can be renewed every two years up to a maximum of ten years.

You can also ask the Supreme Court to force a sale of the property, allowing you to recover the amount you are owed from the proceeds of the sale. However, this process is expensive and complicated and not often used to enforce judgments from Small Claims Court.

Summary

Once you have a filed Payment Order or Default Order, you have five options for getting your judgment paid:

• a Payment Hearing is useful to find out more about the debtor’s financial situation and to get the information you’ll need for pursuing other options;
• an Order for Seizure and Sale if the debtor owns valuable goods such as an expensive car;

Garnishing Orders against the debtor’s wages or bank accounts if the debtor works or you know of money the debtor has saved;

• a Default Hearing if an order for payment has remained outstanding, despite the debtor having access to funds; and
• if the debtor owns land, registration of your order against the land to prevent it from being mortgaged or sold.

Where can you get more information?

• Most of the instructions needed for getting your judgment paid can be found on the forms available at the Small Claims Court registry. If you have any questions, talk to the Small Claims Court registry or read over one of the Small Claims Court booklets available at the registry, at your local public library, and on the Attorney General’s website at www.ag.gov.bc.ca/courts/small_claims.
• Also refer to the other Dial-A-Law scripts in this Small Claims Court series.

[updated May 2015]

This information applies to British Columbia, Canada. Last reviewed for legal accuracy by Jack Montpellier.

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