By Susan Emam
Provincial Government Modernizes Collections Law
In British Columbia, judgment creditors have three main methods of enforcing a monetary order from a debtor: garnishment of a debtor’s wages or bank accounts, forcing the sale of a debtor’s personal property, and/or forcing the sale of a debtor’s real property (residential or commercial). Under the Court Enforcement Act (the “COEA”), these judgment enforcement remedies can be time consuming and costly for a creditor.
The Ministry of Attorney General’s new Money Judgment Enforcement Act (the “MJEA”) hopes to modernize British Columbia’s collection process to make it easier and less costly for people to collect money owed to them. The MJEA will replace the COEA and introduce expansions to collections remedies for judgment creditors, and additional protections for judgment debtors.
Garnishment of Wages
Currently, garnishment of wages requires a creditor to make a court application every two weeks, which must be served upon the debtor’s employer.
Under the MJEA, employers will receive a single notice to garnish wages, which will remain valid until the debt is paid.
Registering Judgments
Currently, monetary orders awarded in other tribunals must be registered with a court registry for a creditor to execute against a debtor. The MJEA will establish a separate registry for creditors to register their judgments for enforcement.
The Money Judgment Registry (the “Registry”) will be searchable and accessible to the public and operate as a subset of the Personal Property Registry. It will have the effect of creating an enforcement charge against all property a judgment debtor owns, regardless of whether the property was acquired before or after the monetary judgment was registered. Monetary orders awarded in the Civil Resolution Tribunal (the “CRT”) will also now be automatically filed with the Registry upon their issuance.
Seizure of Personal Property
The MJEA expands the property that a creditor can seize to include negotiable instruments, securities, licenses, trade secrets, intellectual property, and fixtures. This will afford creditors with more options to collect upon a judgment.
Exemption Expansions
Judgment debtors are allowed to keep a certain amount of their assets, regardless of how much they owe. This is known as exempt property. Currently, judgment debtors are allowed to keep the following assets and claim them as exempt property:
$4,000 of household furnishings
$5,000 for a motor vehicle
$10,000 for work tools
$12,000 in equity if principal residence is within Vancouver or Victoria or $9,000 in equity if principal residence is located elsewhere in BC.
The MJEA will expand the property exemptions in response to societies rapidly shifting standard living and definition of necessities. It will expand these exemptions to include:
Registered Disability Savings Plans
Registered Education Savings Plans
1 computer
1 cell phone
1 bicycle
Streamlining Execution Methods
Under the COEA, creditors need to apply for separate court applications for seizure of personal property, real property, and garnishment. This means that a creditor needs to apply to court for each collections remedy.
Under the MJEA, judgment creditors will be able to specify all collections remedies they would like to pursue on a single application. This will create a more streamlined process and remove the need to a judgment creditor to make frequent court appearances.
Shortened Limitation Deadlines
Under the Limitations Act, creditors have 10 years for the dates of a judgment to proceed with legal collection remedies against a debtor. The MJEA will decrease this limitation period to two years after the date that a monetary judgment has been granted, or the date a judgment debtor provides written acknowledgment liability, whichever is later.
Looking Forward
In 2025, the MJEA will come into effect and introduce amendments to 74 other provincial legislations. The OTLC will continue to monitor these legislative changes and provide updates on the OTLC blog. For more information on the proposed MJEA, visit the provincial government notice here.
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