So you’ve won your hard-fought battle and got a judgment in Ontario small claims court against the person who owed you $35,000. But, judgment or no judgment, he’s not paying. What now?
To collect money on a small claims court judgment, you can:
1. Garnish a bank account.
If you know the debtor’s banking information (banking institution and branch), you can garnish the debtor’s bank account(s). This requires completing and filing with the Small Claims Court an Affidavit for Enforcement Request and a Notice of Garnishment. Then, you need to deliver the Notice of Garnishment to the bank and the debtor. The bank must take money from the debtor’s account and transfer it to the court. The court will then transfer it to you.
2. Garnish wages.
If you know the debtor’s employer, you can garnish the debtor’s wages. The process is similar to the above. Upon receiving the notice of garnishment, the debtor’s employer is under obligation to take a portion of the debtor’s wages and transfer it to the court. The court, again, will transfer it to you.
3. 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. The agency can place phone calls, send letters, and make notes in the debtor’s credit report. However, collection agencies usually charge you a percentage of the amount collected. In addition, some collection agencies may perform investigations to find the debtor’s contact and financial information (if you do not know it or it is no longer valid).
4. Place a lien on the debtor’s real estate property.
This means that any real estate property under the debtor’s name will now have a note of his or her debt. This process requires filing an Affidavit for Enforcement Request and a Writ for Seizure and Sale of Land with the court office and the sheriff. When the debtor tries to sell the property, she or he will not close the deal until paying off the debt. You may also instruct the Sheriff to initiate the sale of the property to collect your money. However, generally, the expenses associated with this are not justified to collect $35,000 or less.
5. Seize property of the debtor that is not land.
You can do this using the same process as the above. However, the writ 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. Such a seizure of property also requires expenses for the sheriff’s services. For this method to be reasonable, you should first ensure that the personal property you are trying to seize is under the debtor’s name. Also, it is better to make sure that it is of sufficient value to compensate you for the amount of the judgment.
6. Call the debtor for an examination hearing.
At this hearing, the debtor is under obligation to disclose his or her financial information. It may be bank accounts, wages, bank statements, tax returns, etc. Also, the debtor must testify under oath concerning his or her financial situation. The main purpose of this hearing is to get information for garnishment or writ. In some cases, the judge sets some payment plan which the debtor must comply with.
The best way to get your money back largely depends on the debtors’ circumstances and information that you have about them. Generally, garnishments are the fastest way to collect debt. At the same time, writs (unless a sale is pending) are less reliable and more costly. 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.
