For a plaintiff, a successful trial will result in a judgment against the defendant. If the defendant has insurance for the type of loss that was sued over, that insurance will satisfy the judgment. However, if there is no insurance and the defendant refuses to pay the judgment voluntarily, the plaintiff has several ways of getting what they are owed by the defendant, now called the debtor. In all cases, the judgment is good for 10 years after which time the plaintiff must sue on the judgment to keep it valid.
Payment Hearing/Subpoena to Debtor Hearing
Before you can decide on the best way to collect on your judgment, you should know the debtor’s financial situation. One way of determining this is at a payment or subpoena to debtor hearing. This hearing is done in court and allows you to ask the debtor questions about his financial situation. The purpose of the hearing is generally to (a) identify assets owned by the debtor that you can go after using one of the other methods talked about below, or (b) put a payment schedule in place that says the debtor has to pay you a certain amount at a certain frequency. Once a payment schedule is in place, if the debtor is abiding by it you can’t do anything else to collect on your judgment. For that reason, if you find out that the debtor has assets you can go after, it’s better not to ask for a payment schedule and simply adjourn the hearing.
Garnishment is a tool that allows you to intercept money owed to the debtor by other people. Essentially, you’re telling those people to pay you instead of paying the debtor. The most common things to garnish are wages and bank accounts. Once served with a garnishment order, the person has to pay the money into court. You then have to make a court application to get the money paid out to you.
There are rules that have to be strictly followed including giving the debtor notice that you have received a garnishment order. As well, there are limits on what and how much money you can garnish in some circumstances. For example, EI or social assistance benefits can’t be garnished.
Seizing and Selling Personal Property
You can hire a bailiff to seize and sell a debtor’s personal property. The cost of hiring a bailiff can be expensive so you want to make sure that the debtor has property valuable enough to justify the process. The most common things to seize are motor vehicles or shares in a company.
There are limits on what can be seized. A debtor is allowed to keep household goods, work tools and motor vehicles up to a certain value. You also can’t seize and sell necessary clothing, medical aids, or anything that the debtor jointly owns with someone else.
Registering Your Judgment Against Land
If the debtor owns land, you can register your judgment on title to the property. This prevents the debtor from selling or mortgaging the property without first dealing with your judgment. Unlike your judgment itself which is good for 10 years, the registration is only good for 2 years.
You can make a court application to have the property sold to satisfy your judgment. However, this can be a complicated and costly process so should only be done if you have a large judgment. In all cases, the debtor will be able to keep a certain portion of the equity they have in the property if it is their principal residence.