Managing debt collection is of fundamental importance to the success of any business. The implementation of an effective system is necessary. In Ontario there are procedures that impose complex restrictions on your ability to collect on a debt. Getting results and initiating the process of commencing or resolving a collection action through the courts requires a skilled litigator. At Chand Snider LLP we have years of experience in this practice area and our experience can go a long way in ensuring you get back what you are owed.
One of the issues that must be addressed prior to commencing a lawsuit against a debtor is determining whether you are within your legal right to commence an action. In Ontario, the Limitations Act imposes a deadline of two years to sue for debt. If more than two years have passed since you last received payment on the debt owing, you may be statute barred from bringing an action against the debtor for the unpaid debt.
When you commence a lawsuit against someone, you do so with the expectation that if you are successful in court, you will be awarded an amount of money that will be paid by the other party. When considering whether to bring a lawsuit against a debtor, there are a few things that must be taken into consideration. First on that list is whether the debtor has a way of paying you back the amount that is owed to you. If the debtor does not have a job, money in the bank, or assets, such as real estate or a car, it may be better off not spending further resources and time commencing an action. The term “judgment proof” is used to describe a debtor that is financially insolvent and whose income and assets, if any, cannot be obtained in satisfaction of a judgment. Although this is not a defence to a claim, it makes the enforcement of a judgment extremely difficult.
Getting awarded judgment in Ontario courts is often only the beginning of the process. Enforcing a judgment on the other hand can be frustrating, difficult and time consuming. An examination in aid of execution is often conducted which serves as a remedy for a creditor who has obtained a judgment against a debtor. At an examination in aid of execution, documents are provided by the debtor showing their finances, assets and debt. At this stage, the creditor has an opportunity to ask questions to the debtor under oath and in front of a court reporter to determine the debtor’s ability to pay on the judgment. The debtor is often hesitant to cooperate and a lawyer with experience in this area will know how to ask the right questions to get the best results.
Another option to enforce your judgement is having a writ of seizure and sale of land issued and filed with the court. A writ of seizure and sale of land can be filed against a debtor in any county or district where the debtor may own land. The writ not only serves to encumber any land presently owned by the debtor, but also where land may be purchased by the debtor in the future. Having a writ of seizure and sale of land filed in the jurisdiction where the debtor owns land can be effective in the long run making it difficult for the debtor to sell or remortgage their home without paying off the judgment.
A notice of garnishment can be issued and filed with a court and is another effective means of enforcing a judgment against the debtor. The notice of garnishment will have the information of the garnishee along with their address and the amount owing. The garnishee can be an employer, bank or someone who owes money to the debtor. Wage garnishment is the process of deducting money from the debtor’s salary through their pay cheque. Wage garnishment will be sent to the court by the debtor’s employer until the debt is entirely paid off and it is legally binding on the employer to fulfil their obligations as the garnishee. If the employer fails to comply, there are options that allow a creditor to sue the garnishee for the full amount of the debtor’s judgment.
At Chand Snider LLP, we offer legal services in collections for individuals and businesses. The right strategy in a collection action makes all the difference. You need lawyers who are creative problem solvers and have the experience required to helping pursue your interests. We offer our clients top quality legal representation and use a variety of tools and mechanisms for enforcing your judgment and ensuring that you get the recompense you deserve.
For all of your collection needs, please call Chand Snider LLP at 416-583-2377.Back to News / Articles