So you’ve won your hard-fought battle and got a judgment in Ontario small claims court against the person who owed you $25,000. Judgment or no judgment, he’s not paying. What now?
To collect money on a small claims court judgment, you can:
- Garnish a bank account. If you know the debtor’s banking information (banking institution and branch), you can oblige the bank to take money from the debtor’s account and transfer it to the court, which will then transfer it to you. This requires completing an Affidavit for Enforcement Request and a Notice of Garnishment, filing the same with the small claims court office and serving it on the bank and the debtor.
- Garnish wages. If you know the contact information of the debtor’s employer, you can, following a process similar to the above, oblige the debtor’s employer to take a portion of the debtor’s wages and transfer it to the court (which again, will transfer it to you).
- Transfer the matter to a collection agency. A debt on a small claims court judgment is the same as a credit card debt. You can, therefore, have a collection agency pursue the debtor for you, with phone calls, letters, and notes in the debtor’s credit report. Of note is that collection agencies usually charge you a percentage of the amount collected, and that some collection agencies may perform investigations to find the debtor’s contact information (if you do not know it or it is no longer valid).
- Place a lien on the debtor’s property. This means that any property registered in the debtor’s name will now have a note of his or her debt. When he or she tries to sell the property, the deal will not be closed until the amount of the judgment is paid to you from the sales proceeds. You may also instruct the Sheriff to initiate the sale of the property to collect your money, but the expenses associated with this are, generally, not justified by collection of $25,000 or less. This process is carried out by filing an Affidavit for Enforcement Request and a Writ for Seizure and Sale of Land with the court office and the sheriff.
- Seize property of the debtor that is not land. This is done by the same process as the above, but the writ registered is one for the Seizure and Sale of Personal Property. Under this writ, the sheriff can seize property that ranges from a car to a computer to compensate for the debt. However, such seizure also requires expenses for the sheriff’s services, and, for this method to be reasonable, you should first ensure that the personal property you are trying to seize is actually registered in the debtor’s name and is of sufficient value to compensate you for the amount of the judgment.
- Call the debtor for an examination hearing. At this hearing, the debtor is obliged to present his or her financial information, such as bank accounts, wages, bank statements, tax returns, etc, and testify with respect to his or her financial situation. A common outcome of this hearing is for a judge to set some sort of payment plan which the debtor must comply with.
The best way to get your money back largely depends on the debtor’s circumstances and information that you have about them. Generally, garnishments are the fastest way to collect the debt, while writs (unless a sale is pending) are a less reliable and more costly method. Collecting through an agency is often fairly effective, and usually requires little personal involvement from you. An examination hearing is a good route if you have little to no information about the debtor’s financial circumstances. Be sure to evaluate your options carefully.