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In general legal terms, a judgment is a decision of a court regarding the rights and liabilities of parties in a legal action or proceeding. More specifically, in the world of debt collection, it’s when a creditor obtains a judgment against you, with the court deciding, based on the evidence presented, that you owe the creditor money and that it should be repaid.
If as a debtor you cannot, or will not, pay their debt, then the ‘execution creditor’ has several means at their disposal to enforce the judgment.
One of the fastest, most common ways to enforce judgments are through ‘garnishments’ of wages or bank accounts. A wage garnishment is a court order that tells an employer to pay into the court’s trust account a determined percentage of the debtor’s wages, which is then transferred to the creditor. According to the Ontario Wages Act, he maximum amount creditors can garnish is 50% of your gross monthly wages.
A creditor can also complete an Affidavit for Enforcement Request and a Notice of Garnishment, filing this with the small claims court office and serving it on the bank and the debtor. Again, the money is transferred to the court and then given to the debtor. A bank garnishment order can take up to 100% of an account balance in order to pay off a debt.
Working through writs, a creditor with a judgment has the right to seize and sell some of the debtor’s property to satisfy the debt. The goods they take must be completely owned by the debtor, without liens or mortgages attached to them. Each province’s Execution Act exempts certain possessions, such as household furnishings, from seizure.
Creditors can also put a lien on a debtor’s property, so that when it is sold, the creditor receives the amount of the judgment thorough the proceeds.
A debt on a small court claims judgment can also be transferred to a collection agency. Usually working for a percentage of the amount collected, the agency will pursue the debtor with phone calls, letters and notes in the debtor’s credit report. They can also track down the debtor’s contact information if it has changed or isn’t known to the creditor.
So when a judgment is made against you, and a creditor starts enforcement, it is important to get the advice of a licensed insolvency trustee, such as Doyle Salewski. If you are unable to pay your debt or come to a new agreement with the creditor, then we can help stop the proceedings against you. By filing for a personal bankruptcy or a consumer proposal, you can find relief from most creditors taking legal action against you (some debt obligations, such as child support, can still be enforced).
At Doyle Salewski, we can help you solve your debt and budgeting crises, using our proven expertise and experience to achieve financial freedom and peace of mind. Contact us today for a free consultation, either through our Ottawa headquarters, 613-237-5555, or our fully bilingual Gatineau office, 819-776-7777. Email: [email protected].