Getting Your Judgment Paid

Obtaining a Small Claims Court judgment – whether at the end of a trial or settlement conference, or by default – is one thing. But getting it paid is something else. What can you do if the person you sued refuses to pay your judgment? Let’s call that person the debtor, and call you the creditor.

"File" your court judgment

If the debtor has defended your claim, then 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). It will be signed by the appropriate person and “filed” or entered in the court records.

If the debtor hasn’t responded to your claim, then you must complete an Application for Default Order (Form 5) instead.

A Small Claims Court judgment is valid for 10 years, so 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
• If 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 might want to send 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 your letter), 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 you to pay off the order. As long as the debtor makes the payments according to the schedule, you can’t take any steps to collect the full amount right away. But 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 you the whole amount immediately and you can take steps to collect it.

What is the procedure for a Default Order?

If the Default Order is for a debt in a specific, easily calculable amount, you can go ahead and take steps to collect it immediately. The Default Order will order the debtor to 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:

One option is a payment hearing

Go to the Small Claims Court registry or write and tell them you want a payment hearing. The purpose of the hearing is to find out information about the debtor’s financial situation. For the hearing, the debtor can be required to bring income tax returns, recent pay stubs and other documents that show the debtor’s 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), so go prepared to question the debtor about his or her employment, bank accounts and so on. You can use the information gained at the payment hearing to help you try to collect on your judgment (i.e., by garnishing bank accounts or employment income). 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.

A second option is seizure and sale of goods

You can apply for an Order for Seizure and Sale. This allows a court bailiff to take and sell the debtor’s goods or property. You may decide to go this route if the debtor doesn’t appear to have any cash income, but has valuable assets, like a good car or boat or worthwhile company shares.

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

• $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 gets paid first from the sale of the goods. So you’ll want to make sure that the debtor has goods worth taking and selling at a court-ordered auction.

To help with this, you might be able to give a copy of the Payment Order or Default Order to the Insurance Corporation of British Columbia (ICBC) or do a search at 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 go ahead, ask the Small Claims Court registry for the forms to complete for an Order for Seizure and Sale. You’ll have to pay a deposit to cover the bailiff’s estimated time and costs.

An Order for Seizure and Sale is valid for one year.

A related option is to ask a bailiff to do a search of their 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.

A third option is garnishment

Assume you have a Payment Order for $1,000, and you know where the debtor works or has a bank account. You can go to the Small Claims Court registry and apply for a Garnishing Order. You then present the Garnishing Order to the debtor’s employer or the branch of the bank where the debtor has an account, whichever you are going after, 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. This process is called garnishing the debtor’s wages or bank accounts.

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

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

A fourth option is a default hearing

If a Payment Schedule was made after the trial or settlement conference or following a payment hearing, and the debtor hasn’t paid you as required, you can ask for a default hearing. You are responsible for setting out what items the debtor must bring to the default hearing, such as banking records, tax returns, utility bills and credit card statements. If you don’t include any of these items when you apply for a default hearing, the debtor isn’t obligated to bring anything to the hearing.

At the hearing, the debtor must explain to a judge why he or she hasn’t obeyed the Payment Schedule. After listening to the debtor, 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.

If the debtor doesn’t attend the default hearing, you can ask the judge to issue an arrest warrant.

A fifth option is registration against land

You can register your Payment Order against any land owned by the debtor in British Columbia. This will make it very difficult for the debtor to sell or mortgage the land unless he or she pays your judgment first. What this means is that you might not get paid immediately, but the Payment Order can stay registered against the land for some time, then when the debtor sells or mortgages the land, your judgment will have to be 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. Then you take it to the Land Titles Office where the debtor owns the land, and register your judgment against the title to the debtor’s land. 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, but this is an expensive and complicated procedure and not often used to enforce a Small Claims Court judgment.

Summary

Once you have a filed Payment Order or Default Order, you have five options for getting your judgment paid. Depending on what the debtor owns and his or her income, you can take some or all of these steps:

• 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.
• Obtaining an Order for Seizure and Sale is useful if the debtor owns valuable goods such as an expensive car.
• Garnishing the debtor’s wages or bank accounts can be useful if the debtor works or has money in an account.
• A default hearing can be used if there’s already a Payment Schedule and the debtor isn’t paying as scheduled.
• And if the debtor owns land, registering your order against the land is likely to get you money eventually.

Where can you get more information?

• Most of the instructions you need 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 staff 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 December 2013]

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