When one party owes money to another, litigation is often a necessary process. However, not all debtors abide by court judgments, and some do not make payments as ordered. While recovering debt can be complicated and expensive, there are various debt collection methods, including seizure and sale of land, which is a post-judgment collection tool.
What is Property Seizure?
Property seizure is a means to enforce debt collection and occurs after a court has granted a judgment to the creditor. The debtor’s property is taken on behalf of the creditor and is subsequently sold to either wholly or partially fulfill the outstanding judgment debt.
How Does Property Seizure Happen?
When collecting a debt, it is crucial to ensure that the appropriate protocols and practices are followed to avoid potential delays or problems. In Alberta, specific steps must be taken in a particular order before property can be seized and sold.
Obtain a Court Judgment
The first step when seeking to collect on a debt is to obtain a court judgment for the debt. A court judgment is valid for 10 years from the date of judgment. If required, a judgment may be renewed for an additional period of 10 years.
Register a Writ of Enforcement
To enforce a judgment for the seizure of property, a Writ of Enforcement must be obtained and registered. The Writ is registered with the Personal Property Registry in Alberta. Registration can take place at most registry offices in the province and can be simplified with the help of an experienced collections lawyer.
If the Provincial Court of Alberta has awarded a judgment, it must be registered with the Court of King’s Bench before a Writ of Enforcement can be registered.
Engage the Assistance of a Bailiff
A creditor cannot seize items themselves. After a Writ has been registered, a civil enforcement agency or bailiff will be retained to enforce the seizure of personal property from the debtor. Before retaining a bailiff, information about the judgment will need to be provided to the civil enforcement agency to carry out the collection. Generally, a bailiff or civil enforcement agency will require the following documentation:
- A letter of instruction;
- A Warrant;
- A Notice of Seizure of Personal Property;
- A Notice of Objection to Seizure of Personal Property; and
- Information for Debtor form.
Before goods can be collected, the debtor must be served with a Notice of Seizure of Personal Property form. If a debtor cannot be personally served, a Notice of Seizure of Personal Property may be posted on the door of a property listing items to be seized.
What Happens if a Debtor Hides or Sells Items to Be Seized?
A debtor cannot hide, remove or sell goods to avoid their seizure. If they do, the debtor may be found in contempt of court or charged with an offence under the Criminal Code of Canada.
Can Seized Property Be Sold to Recover the Debt?
Once property has been seized, if the debtor does not file an objection, the property will usually be sold with the net proceeds used to fulfill any outstanding debt. The proceeds may be distributed among several judgment creditors depending on the circumstances.
If the debtor does file an objection, the matter will be heard before the court before further action can be taken in relation to the property.
What Items Can be Seized?
It is prudent to search the Personal Property Registry to ensure that any item(s) to be seized are not subject to a priority claim by another creditor.
The Civil Enforcement Act governs the seizure of property and prescribes certain limits regarding what items can and cannot be seized.
Under the Civil Enforcement Regulations, a debtor is entitled to retain certain property, including:
- one year’s worth of food;
- dental and medical aids or equipment;
- clothing up to a value of $4,000;
- a vehicle up to the value of $5,000; and
- appliances and furniture with a value of up to $4,000.
Complications may arise when a creditor seeks to seize goods on which the debtor is making payments, may be unclear whether the debtor actually owns the property.
How Is Real Estate Seized?
If a debtor owns real estate, a creditor may register a Writ against the title to that property. Once a Writ has been registered, the creditor may commence legal proceedings to sell the property.
Even if the creditor chooses not to force the sale of the real estate, they can leave the Writ in place. The Writ will appear on any title search of the property as a charge or lien against the land. As a result, if the debtor wishes to sell the property, they may be forced to use sale proceeds to fulfil the judgment debt.
What Is Garnishment?
When seeking to fulfil a debt judgment, an alternative to property seizure is collecting on liquid assets through garnishment. Garnishment allows the creditor to seize a percentage of money owing to the debtor, including their wages or bank accounts. A qualified collection lawyer can advise of the extent to which each income source can be garnished.
Contact the Debt Collection Lawyers at DBH Law in Calgary to Discuss Your Debt Collection Options
The skilled debt collection lawyers at DBH Law in Calgary assist clients with enforcing debt collection judgments arising from various disputes. Our lawyers have substantial experience and resources to take action quickly to satisfy outstanding judgments. Whether seizing goods and real property or commencing garnishment proceedings, our team is experienced in debt collection litigation. If you need help collecting debt owing to you, or feel you have exhausted all of your options to obtain repayment, contact us online or call us at 403-252-9937 to speak with a member of our talented team.