Jordan T. Henrie Discusses Creditors
I often consult with clients regarding creditor/debtor situations where money is owed by one party to another. In some circumstances, a creditor’s only recourse to enforce a debt is to initiate legal proceedings against the debtor. Many creditors I speak to are under the impression that if they are successful at Court and obtain a money judgment against a debtor, that the proceedings are complete and that they can expect their money shortly thereafter. Unfortunately, in some cases obtaining a money judgment against a debtor is only just the beginning. Once a creditor has obtained a money judgment through the litigation process, in many cases the creditor must next take steps to enforce the judgment, unless the debtor voluntarily pays the money owed. This can often be a difficult, time consuming, and costly process.
The first step in the enforcement process is to file the money judgment with the Court of Queen’s Bench in the judicial center in Alberta where the judgment was obtained.
Next, the creditor should then prepare a Writ of Enforcement, which is a document that entitles the creditor to enforce the money judgment. The Writ must be filed with the Court of Queen’s Bench and should also be registered against the debtor in the Personal Property Registry. If the creditor intends to take action against land owned by the debtor, the creditor will also need to order a certified copy of the money judgment and file that along with the Writ with the Land Titles Office against the debtor’s property.
Once these steps have been taken, the creditor may then use the enforcement processes available through the Court of Queen’s Bench in order to collect on the money judgment anywhere in Alberta. The general enforcement processes available to creditors include the following:
1. Garnishee of bank accounts, employment income or other income;
2. Seizure of personal property, securities or other property;
3. Initiate the sale and disposition of land; and
4. Arrange for questioning of the debtor to determine his/her financial circumstances.
It should also be noted that all enforcement proceedings are deemed to be taken on behalf of all unsecured creditors of the particular debtor and that no creditor with a Writ has priority. This means that, any amount collected by any unsecured creditor is shared on a pro-rata basis among all unsecured creditors, subject to some exceptions. If you require advise or assistance regarding any step of a creditor/debtor situation, whether it be initiating legal proceedings or collecting on a money judgment, please do not hesitate to contact me or any other members of our firm for a consultation.