Winning a court case or being granted default judgment is a huge step for a successful party in litigation. Where the court makes a monetary award (called “damages”) the person who owes the money is called a judgment debtor and the person to whom the damages are owed is called a judgment creditor.
A judgment creditor being awarded damages may not be the end of the process, as the judgment debtor may be unable or unwilling to repay the debt. In that case, enforcement measures such as garnishment or seizure, will be necessary in order to collect what is owed.
“Garnishment” is an enforcement procedure which allows judgment creditors to essentially intercept money before it gets to the judgment debtor. Where a third party, called a garnishee, owes money to the judgment debtor for wages or other payments, the Alberta Civil Enforcement Act allows for a process by which the third party is required to pay money into court for the benefit of the judgment creditor.
The two most common garnishees are the debtor’s employer and the debtor’s bank. . In order to garnish, the judgment creditor will have to identify the garnishees, as this information may not be readily available.
Once a judgment debtor does not respond and it becomes clear that enforcement steps will have to be taken, the judgment creditor should file a Writ of Enforcement with the court. A Writ of Enforcement confirms the identity of the debtor and creditor, as well as the amount currently owed.
After it is filed with the court, the Writ of Enforcement should also be registered at the Personal Property Registry. This serves as notice that the judgment debtor owes the judgment creditor money. (The Writ of Enforcement form is located on the Alberta Courts website).
Writs expire after 2 years. The judgment creditor must file a Status Report with the Personal Property Registry prior to expiry to renew the Writ. Status Reports must also be filed to change the amount owed by the judgment debtor whenever a payment is made on the debtor’s account. The Status Report form is located on the Government of Alberta website.
Once a Writ is filed at the Personal Property Registry, the next step is to file a Garnishee Summons with the Court. The Garnishee Summons directs the third-party garnishee on their obligation to pay money into court. The Summons must be accompanied by a supporting affidavit and information directed to the court clerk including the amount owing. The Garnishee Summons form is also located on the Alberta Courts website.
After the Garnishee Summons is filed with the court, three copies of the Summons should be served on the garnishee along with a $25 administration fee. If the garnishee is an individual, they may be served via personal service or recorded (registered) mail. For corporate garnishees, service may be affected by recorded (registered) mail to the registered corporate office or through personal service upon an officer or director of the corporation.
Once the Summons has been received, the garnishee has 15 days to serve a copy of the Summons upon the debtor, either personally or by mail. The garnishee must also, within 15 days, deliver a response to the court clerk along with the funds or a statement denying that the garnishee has any obligation to the debtor. The Garnishee Summons includes instructions on what exactly must be provided.
Where the garnishee is an employer of the debtor, there are limits as to how much can be garnished from a single pay cheque. The debtor will be allowed to keep $800 per month, plus an additional $200 per dependent. Garnishee Summons for employers expire 2 years after it is issued unless it has been renewed.
Where the garnishee is the debtor’s bank, there is no limit as to how much funds can be garnished. The judgment creditor is entitled to all the money in the debtor’s account, up to the amount of the debt. Garnishee Summons upon financial institutions expire 60 days after issuance unless it is a joint account. In the case of a joint account, only half the amount in the account can be garnished and the Summons is considered a one-time obligation.
All garnishment amounts will be paid into the Court. The Court will then distribute the funds to the judgment creditor. If there is more than one registered judgment creditor and the amount will not cover all the debts, the amount will be distributed pursuant to a Proposed Distribution, which is required by law in those circumstances. Receiving a Garnishee Summons or garnishing a judgment debtor can be a confusing process. If you need advice or have questions, please contact our team.