Getting Your Judgment Paid: Difference between revisions

From Clicklaw Wikibooks
Jump to navigation Jump to search
No edit summary
No edit summary
Line 1: Line 1:
{{Dial-A-Law Blurb}}
{{Dial-A-Law Blurb}}
{{Dial-A-Law TOC|expanded = smallclaims}}
{{Dial-A-Law TOC|expanded = smallclaims}}


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.
Winning in small claims court does not guarantee you will be paid. What can you do if the person you sued refuses to pay you? This script explains that you have 5 options:


==“File” your court judgment==
*a '''payment hearing'''
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.
*an '''order for seizure and sale of goods'''
*a '''garnishment order'''
*a '''default hearing'''
*'''registration of a payment order against land'''


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).
But first, you must file your '''payment order''' or default order (explained below). You are called the creditor after you win a judgment. The defendant who you sued is called the debtor. If the person you sued has no assets and no job, or if they became bankrupt or moved out of the country, you may never get paid.


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:
==File your court order==
*the debtor confirms the cause of action; or
After a judge makes a payment order at the end of a trial or settlement conference, you must go to the court registry, fill in a ''Payment Order'' form (Form 10), and give it to the court registry.
*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==
If the defendant did not reply to your claim by the deadline, you can ask the court for a '''default order'''. You must complete an ''Application for a Default Order'' (Form 5). If the amount you claimed is a specific, easily calculated amount, a judge can make an order for you to start collecting it immediately. The default order will require the debtor to pay the amount you claimed plus interest and expenses. In some cases, you will have a hearing with a judge to prove the amount of your claim. A default order isn’t automatic, and you must be prepared to give evidence and show supporting documents to prove the amount owing.
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 small claims court order lasts for 10 years. After that, you will have to ask the court to extend the order. The court can do that if:
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?==
*the debtor confirms the cause of action (the thing you sued for); or
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.  
*you sue again based on the previous order, before the first 10 years are over.


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.
==Write and ask the debtor to pay you==
After filing your payment order or default order, send a copy of it to the debtor with a letter asking them to pay you. Make the letter short and clear, warning that you will take further action if they don’t pay by a certain date. Set a reasonable deadline (for example, 14 days from the date you send your letter). Include the address where to send the payment. Send the letter by registered mail.


==What can you do if the debtor doesn’t pay?==
==If there's a payment schedule==
If the debtor doesn’t pay your Payment Order or Default Order, you have five options, discussed in detail below:
A payment order might include a payment schedule that tells the debtor how much they must pay and how often they must pay it. If the debtor makes the payments following the schedule, you can’t collect the full amount all at once. But if there’s no payment schedule or if the debtor doesn’t follow the schedule, they will owe you the full amount immediately and you can take steps to collect it.
#a Payment Hearing
#seizure and sale of goods by the court bailiff
#garnishing the debtor’s wages or bank accounts
#a Default Hearing (if the debtor doesn’t obey a Payment Schedule)
#registration against land


==Option 1: a Payment Hearing==
==The five options if the debtor doesn't pay you==
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.
===1. Payment hearing===
The purpose of a payment hearing is to get 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 hearing, the judge considers whether the debtor can pay the payment order, and whether it should include a payment schedule.


If the debtor doesn’t attend the Payment Hearing, you can ask the judge to issue an arrest warrant, compelling the debtor to attend.
At the hearing, be ready to ask the debtor about their employment, bank accounts, and other assets and sources of income. You can use the information you get at the payment hearing to help collect your judgment. And the costs of your application for the payment hearing will be added to the amount the debtor must pay you.


==Option 2: seizure and sale of goods==
If the debtor doesn’t attend the payment hearing, you can ask the judge to issue an arrest warrant, forcing the debtor to attend. But that’s rarely done. Debtors usually get many chances to pay.
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.
 
===2. Order for 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. The order lasts for one year. This option can be useful if the debtor doesn’t have any income but has valuable assets, such as an expensive car, a boat, or shares in a profitable company. But you cannot seize certain things. The ''[http://www.bclaws.ca/civix/document/id/complete/statreg/96078_01 Court Order Enforcement Act]'' lets a debtor keep the following things:


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,
*$4,000 of household furnishings and appliances,
*A vehicle worth up to $5,000; and
*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.
*$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.
And the bailiff will be paid first from the sale of the goods, so you should be sure that the debtor has goods worth taking and selling at a court-ordered auction.


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.
If you get an order for the seizure and sale of goods, 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 in their name. You can also search the debtor’s name in the [http://www2.gov.bc.ca/gov/content/housing-tenancy/owning-a-home/manufactured-home-registry BC Manufactured Home Registry] and the [http://www2.gov.bc.ca/gov/content/employment-business/business/managing-a-business/permits-licences/bc-registry-services-personal-property-registry Personal Property Registry] to see if the debtor owns any personal property worth more than the things they can keep.


Also, be aware that an Order for Seizure and Sale is valid for one year.
If you seek an order for seizure and sale, you will need to pay a deposit to cover the bailiff’s estimated costs.


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.
A related option is to ask a bailiff to search the court’s records to see if any other creditors are trying to collect a debt against the same debtor. If so, you may be able to share in some of the recovery from the debtor. But some creditors, such as the Canada Revenue Agency, may have priority over assets.


==Option 3: garnishment==
===3. Garnishment order===
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.  
If you get a garnishing order from the court, you can give it to the debtor’s employer or 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.
Normally, only 30% of a debtor’s wages can be garnished. And there are some technical rules and steps that you must followed. Discuss the procedure with the court registry staff before starting garnishment.


For more information on garnishment, refer to Dial-A-Law script [[Garnishment (Script 251)|251]] on “Garnishment”.
Script [[Garnishment (Script 251)|251]] has more on garnishment.


==Option 4: a Default Hearing==
===4. 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.  
You can ask for a default hearing from the registrar (Form 5) if the debtor doesn’t obey a payment schedule. At a default hearing, the court asks the debtor why they have not made payments the court already ordered, at trial, in a settlement conference, or after 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 the default hearing, the debtor must explain to a judge why they have not followed the payment schedule. The judge can either confirm the original payment schedule or change it. 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.
For the hearing, you must decide what items the debtor must bring to court, including banking records, tax returns, utility bills and credit card statements. If the debtor does not attend the default hearing, you can ask the judge to issue an arrest warrant.


==Option 5: registration against land==
===5. Registration of payment order 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 [http://www.bconline.gov.bc.ca www.bconline.gov.bc.ca].  
You can register your payment order against any land the debtor owns in British Columbia. This will severely restrict the debtor’s ability to sell or mortgage the land until they pay the judgment. To find out if the debtor owns land in BC, do a name search at the Land Title Office through [https://www.bconline.gov.bc.ca/ BC OnLine].


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.
To register your payment order, you must get a certificate of judgment from the small claims court registry and file it with the [https://ltsa.ca/land-title-office-locations Land Title Office] that has the records of the debtor’s land. The registration is good for 2 years, and can be renewed every 2 years up to 10 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.
You can also ask the BC supreme court to force a sale of the property, so you can recover the amount you are owed from the proceeds of the sale. But this process is expensive and complicated. And it’s not normally used to enforce small claims court judgments.


==Summary==
==More information==
Once you have a filed Payment Order or Default Order, you have five options for getting your judgment paid:
*The [http://www.smallclaimsbc.ca/ small claims website] has a section on [http://www.smallclaimsbc.ca/judgment/collecting-on-judgment collecting on judgment].
*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;
*Check the other Dial-A-Law scripts in this [http://www.cbabc.org/For-the-Public/Dial-A-Law/Scripts/Small-Claims-Court small claims court series].
*an Order for Seizure and Sale if the debtor owns valuable goods such as an expensive car;
*Check the BC government guide called ''[http://www2.gov.bc.ca/gov/content/justice/courthouse-services/small-claims/how-to-guides/getting-results Getting Results]''.
*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 [http://www.ag.gov.bc.ca/courts/small_claims www.ag.gov.bc.ca/courts/small_claims].
*Also refer to the other Dial-A-Law scripts in this [http://www.cbabc.org/For-the-Public/Dial-A-Law/Scripts/Small-Claims-Court Small Claims Court series].


[updated August 2017]


[updated May 2015]
'''The above was last reviewed for accuracy by Anna Kurt and edited by John Blois.'''


'''The above was last reviewed for accuracy by Jack Montpellier.'''
----
----
----



Revision as of 23:38, 18 August 2017

Winning in small claims court does not guarantee you will be paid. What can you do if the person you sued refuses to pay you? This script explains that you have 5 options:

  • a payment hearing
  • an order for seizure and sale of goods
  • a garnishment order
  • a default hearing
  • registration of a payment order against land

But first, you must file your payment order or default order (explained below). You are called the creditor after you win a judgment. The defendant who you sued is called the debtor. If the person you sued has no assets and no job, or if they became bankrupt or moved out of the country, you may never get paid.

File your court order

After a judge makes a payment order at the end of a trial or settlement conference, you must go to the court registry, fill in a Payment Order form (Form 10), and give it to the court registry.

If the defendant did not reply to your claim by the deadline, you can ask the court for a default order. You must complete an Application for a Default Order (Form 5). If the amount you claimed is a specific, easily calculated amount, a judge can make an order for you to start collecting it immediately. The default order will require the debtor to pay the amount you claimed plus interest and expenses. In some cases, you will have a hearing with a judge to prove the amount of your claim. A default order isn’t automatic, and you must be prepared to give evidence and show supporting documents to prove the amount owing.

A small claims court order lasts for 10 years. After that, you will have to ask the court to extend the order. The court can do that if:

  • the debtor confirms the cause of action (the thing you sued for); or
  • you sue again based on the previous order, before the first 10 years are over.

Write and ask the debtor to pay you

After filing your payment order or default order, send a copy of it to the debtor with a letter asking them to pay you. Make the letter short and clear, warning that you will take further action if they don’t pay by a certain date. Set a reasonable deadline (for example, 14 days from the date you send your letter). Include the address where to send the payment. Send the letter by registered mail.

If there's a payment schedule

A payment order might include a payment schedule that tells the debtor how much they must pay and how often they must pay it. If the debtor makes the payments following the schedule, you can’t collect the full amount all at once. But if there’s no payment schedule or if the debtor doesn’t follow the schedule, they will owe you the full amount immediately and you can take steps to collect it.

The five options if the debtor doesn't pay you

1. Payment hearing

The purpose of a payment hearing is to get 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 hearing, the judge considers whether the debtor can pay the payment order, and whether it should include a payment schedule.

At the hearing, be ready to ask the debtor about their employment, bank accounts, and other assets and sources of income. You can use the information you get at the payment hearing to help collect your judgment. And the costs of your application for the payment hearing will be added to the amount the debtor must pay you.

If the debtor doesn’t attend the payment hearing, you can ask the judge to issue an arrest warrant, forcing the debtor to attend. But that’s rarely done. Debtors usually get many chances to pay.

2. Order for 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. The order lasts for one year. This option can be useful if the debtor doesn’t have any income but has valuable assets, such as an expensive car, a boat, or shares in a profitable company. But you cannot seize certain things. The Court Order Enforcement Act lets a debtor keep the following things:

  • $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.

And the bailiff will be paid first from the sale of the goods, so you should be sure that the debtor has goods worth taking and selling at a court-ordered auction.

If you get an order for the seizure and sale of goods, 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 in their name. You can also search the debtor’s name in the BC Manufactured Home Registry and the Personal Property Registry to see if the debtor owns any personal property worth more than the things they can keep.

If you seek an order for seizure and sale, you will need to pay a deposit to cover the bailiff’s estimated costs.

A related option is to ask a bailiff to search the court’s records to see if any other creditors are trying to collect a debt against the same debtor. If so, you may be able to share in some of the recovery from the debtor. But some creditors, such as the Canada Revenue Agency, may have priority over assets.

3. Garnishment order

If you get a garnishing order from the court, you can give it to the debtor’s employer or 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.

Normally, only 30% of a debtor’s wages can be garnished. And there are some technical rules and steps that you must followed. Discuss the procedure with the court registry staff before starting garnishment.

Script 251 has more on garnishment.

4. Default hearing

You can ask for a default hearing from the registrar (Form 5) if the debtor doesn’t obey a payment schedule. At a default hearing, the court asks the debtor why they have not made payments the court already ordered, at trial, in a settlement conference, or after a payment hearing.

At the default hearing, the debtor must explain to a judge why they have not followed the payment schedule. The judge can either confirm the original payment schedule or change it. 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.

For the hearing, you must decide what items the debtor must bring to court, including banking records, tax returns, utility bills and credit card statements. If the debtor does not attend the default hearing, you can ask the judge to issue an arrest warrant.

5. Registration of payment order against land

You can register your payment order against any land the debtor owns in British Columbia. This will severely restrict the debtor’s ability to sell or mortgage the land until they pay the judgment. To find out if the debtor owns land in BC, do a name search at the Land Title Office through BC OnLine.

To register your payment order, you must get a certificate of judgment from the small claims court registry and file it with the Land Title Office that has the records of the debtor’s land. The registration is good for 2 years, and can be renewed every 2 years up to 10 years.

You can also ask the BC supreme court to force a sale of the property, so you can recover the amount you are owed from the proceeds of the sale. But this process is expensive and complicated. And it’s not normally used to enforce small claims court judgments.

More information


[updated August 2017]

The above was last reviewed for accuracy by Anna Kurt and edited by John Blois.



Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International Licence Dial-A-Law © People's Law School is licensed under a Creative Commons Attribution - NonCommercial - ShareAlike 4.0 International Licence.