Breakwater Law

Breakwater Law

250-999-8966

  • About
  • Our Team
  • Blog
  • Practice Areas
  • Contact Us

So you won in court…but how to collect?

May 11, 2022 by breakwateradmin

Aaron Duong is a business lawyer and debtor-creditor lawyer in Victoria, BC.

So, you had your day in court and walked away with a money judgment in hand. Great! As the feeling of vindication subsides, one question invariably arises: ok, now what?

After fighting a legal battle, it’s easy to forget that winning in court is only 50% of the war. What you’ve won is a piece of paper signed by a judge that confirms you’re owed a certain sum of money – and it’s now your job to collect. 

There are three primary methods to collect against a judgment debtor:

Registering your judgment at Land Titles

If you know that your judgment debtor (for simplicity, let’s call the debtor “Steve”) owns real estate, you can register your judgment against that property’s title. Once registered, you’ve put the world on notice that Steve owes you money – especially potential purchasers of his property, if Steve were to ever sell it. Typically, banks giving mortgages to purchasers require that any judgments registered against the property being sold be paid out in the process of the sale. So, Steve would likely have to pay out your judgment when he sells his property.

Pro: this method has a reasonably good chance of producing fruit.

Con: you’d likely be playing the long game; it could be years before Steve sells his property (or is forced to).

Seizing Personal Property

If you know that Steve owns big-ticket assets with substantial value, such as cars, boats, RVs/trailers, etc., you may be able to get a court order allowing you instruct a bailiff to seize those assets, which would then be sold at auction. The pot of money created by the seizure and sale would then be distributed among Steve’s creditors, including you.

Pro: again, this method has a reasonably good chance of getting at least partial payment on your judgment. You are also usually entitled to get paid back for the cost of the bailiff out of the sale proceeds.

Con: the vehicle(s) seized might not be worth much, and, there is a good chance that Steve borrowed money from a bank or other lender to purchase these assets in the first place. Those lenders (called secured creditors) get first priority over any sale proceeds, usually up to the amount owed to them by Steve. You only get what’s left over, which can often be far less than 100% of what you’re owed.

Garnishment

If you know where Steve works or banks, you can apply to the Supreme Court for a garnishing order. This is an order that allows you to grab some or all of Steve’s paycheque or bank account. A garnishing order is then served upon Steve’s employer, bank, or other entity that owes a debt to Steve. Your garnishing order would act to redirect some of the paycheque, bank account, or the money owed to Steve to the Court. Once that money is paid into court, you’d be able to apply to have it paid to you to satisfy some or all of your judgment.

Pro: a fairly efficient way of getting partially or fully paid if you know Steve has a decent paycheque or a decently funded bank account.

Con: you may be sharing that pot with other people who have also successfully sued Steve. It is also difficult or impossible to effectively garnish if you don’t know what precise branch of a bank Steve has an account with. Finally, you have to get a new order for every time you want to garnish – so if you’re garnishing Steve’s paycheque, you have to get a new order every time Steve gets paid. Annoying and costly.

Which Method to Pick?

Of course, each case is different and circumstances can vary wildly, which in turn means that some of the above methods may be more effective than others. And yes, depending on a debtor’s financial circumstances, sometimes none of the methods are effective. Post-judgment enforcement can be slow, complicated, and frustrating – especially if you discover that your long overdue debtor has, by circumstance or design, very few assets, or if you become embroiled in additional conflict with other creditors, all itching to get their piece of the debtor’s assets. We call a debtor with few assets and a paltry cash flow “judgment-proof”… this means, a debtor against whom a judgment is pretty much useless.

I’ve had a number of clients go through this process – some who came out at the end with more gray hairs, a lighter wallet, and emptier hands, even after winning in court. Several of them felt like they had no choice but to follow through with every possible enforcement step, having spent a small fortune getting their judgment in the first place.

The key concept, though, is this: be careful about how much money you spend taking chances at recovering money owed to you. For example, spending $1,000 to take a 50% shot at recovering a debt of $1,000 is financially irrational.

Speaking with a lawyer if you’re unsure what to do next, or if you’re wondering whether your efforts are going to bear fruit, could save you a potentially huge amount of hassle and headache. And although we are not magicians who can make money appear out of thin air (we’d be in the wrong line of work if so), there are context-dependent mechanisms that can sometimes extract value from an otherwise “judgment-proof” debtor. We can also let you know if a judgment is financially worth pursuing, because sometimes, they just aren’t, and you’re better off knowing that before you start sinking time and money into it.

Filed Under: On Litigation - a Litigator's Blog Tagged With: #litigation, #protips

On Not Accidentally Purchasing an Air BnB Property Subject to GST

July 12, 2018 by breakwateradmin

An issue I ran into recently is, what if you buy a property that was being used by the seller as an Air BnB?

I’m not a tax lawyer, but, I did out of curiosity wade through copious volumes of Canada Revenue Agency publications, the Excise Tax Act and several articles. As typical with CRA publications, which don’t seem to be written for regular human beings to consume, they left me with a lot of questions, and a refreshed appreciation for how many potential landmines there can be in property transactions.

One thing was abundantly clear, and that is: if you are going to buy any residential property, you need to make pretty extensive inquiries of the sellers to make sure that the sale is not subject to GST.

Air BnBs are stealthy ninjas. Any ordinary looking single family dwelling, or condo, could have been operated as an Air BnB by its owner. You, as purchaser, are liable for GST unless a sale is exempt… a property used chiefly for short term rentals, where the seller was claiming GST input tax credits in respect of the property, is almost certainly subject to GST. There are other ways the property could be subject to GST. You could end up footing a stiff GST bill if you fail to make the right inquiries about the sellers’ use of and relationship with the property, and fail to protect yourself in the sale contract, regardless of how you intend to use the home.

You could end up paying GST on a $1M home (ouch!) that you intended to just use as your principal residence, just by not realizing it was an Air BnB. That’s a $50,000 mistake.

Caveat emptor, or, buyer beware: instruct your realtor to make the right inquiries, and protect yourself in the sale contract accordingly. Ideally, engage your lawyer before any conditions on the contract are removed.

Jo McFetridge is a lawyer in Victoria, B.C.

Filed Under: Postcards From the Trenches Tagged With: #protips

On Picking a Litigation Lawyer

June 18, 2018 by breakwateradmin


This post represents my personal thoughts on picking a litigation lawyer.

Litigation is rarely open-and-shut. That means, picking a lawyer is sort of like picking someone you want to marry: you’re in for a long haul, it’s up close and personal, and that person has some serious control over your financial health. I get a lot of new clients who have realized they and their previous counsel weren’t a great fit, and they developed relationship regret.

“Fit” isn’t necessarily a commentary on the quality of your lawyer. Let’s be honest: as a layperson, you’re probably not in the best position to know whether or not the lawyer you’re about to hire is very good. No insult intended… how are you supposed to know if the legal advice you’re getting is good or bad? That’s why you’re hiring a lawyer! Rather, in picking a lawyer, recognize what you can realistically pick for, and what you can’t. “Fit” is more about whether or not a lawyer is right for YOU.

One good way to select for quality is to meet up with lawyers who were specifically recommended to you by people you trust: friends, family, colleagues. A lawyer who retains the good professional opinion of their client after a long or grueling litigation file is probably a decent bet. Did the lawyer in question handle the file in a sensible and practical way? Did they know which battles were worth spending time and money on, or did they turn every little disagreement into a court application? Did they stay calm under fire, or did they head for the hills when the going got tough?

Another good way is to interview a number of lawyers before making your decision. Most lawyers will offer a complimentary or low-priced initial consult to new clients. See what sort of advice you get, and how it’s delivered to you. At the end of your interview process, which lawyer did you feel was the best fit for you?

There are a couple things to look for, in my experience. First, and most importantly, did you feel comfortable with the lawyer? Did they speak to you in language, in terms, that you understood, or did they pepper you with self-aggrandizing statements, or legal gobbledegook? The way a lawyer communicates with you in that initial consult is an excellent indicator of how they will communicate with you throughout your legal matter. It won’t help you much if the advice you’re getting sounds like a gatling gun of Latin or legalese. How are you supposed to make good decisions if you can’t understand what the heck is going on?

Dress and hourly rate aren’t, in my experience, necessarily correlated with quality. Trust your gut, not the price tag.

All in all, your lawyer’s value to you is subjective, and personal. Do you feel confident in your lawyer? Do you understand them when they communicate to you? Do you feel their rate is reasonable? Does the lawyer make you feel comfortable? Good! Then hire THAT person. Don’t just hire the high priced, smooth-talking mumbo jumbo lawyer in a fancy suit because you think they must be better.

And, if you realize you made the wrong choice, then consider getting a divorce, so to speak. Don’t labour along in a relationship that isn’t working just because you feel like it’ll be too expensive or too much hassle to end it. Coincidentally, that’s usually also my advice to family clients 🙂

Jo McFetridge is a family lawyer, estates lawyer and business lawyer in Victoria, B.C., and has a virtual office in Terrace, B.C.

Filed Under: Postcards From the Trenches Tagged With: #familylaw, #litigation, #protips

On Do-It-Yourself Separation Agreements

May 7, 2018 by breakwateradmin


By Jo McFetridge, Family Lawyer in Victoria, B.C.

I consider this a public service announcement.

Please, please don’t use one of those “free”, do-it-yourself separation agreements that you can download on the Internet. Please consult a family lawyer instead.

This is kind of like a Holmes on Homes blog post, because while I’d love to be a TV star, I’m sure the Law Society would frown upon me running a TV show where I swoop in and rescue people from their legal DIY disasters.

These DIY agreements are atrocious. They really will not save you money or trouble. They aren’t acceptable to lenders on a mortgage refinance, either.

I’ve yet to see one in this office that wasn’t a piece of garbage. I can’t tell you how many people per year come in to my office, needing to be rescued from the fallout from these little gems. The most common issues include:

– agreement fails to deal with all issues and claims arising from the relationship;
– agreement fails to deal with one or more significant assets;
– agreement is frankly incomprehensible;
– agreement is ambiguous with respect to significant issue(s); and, my favourite:
– agreement fails to deal with the “what if” when one party isn’t able to follow through with their end of the deal, chiefly around refinancing the family home in that person’s sole name.

A binding, proper separation agreement drafted by a lawyer is a modest cost. On the other hand, litigation over a DIY disaster can cost you triple, five times that.

Perhaps more importantly, the holes these DIYs create by what they miss or treat incompletely open up fertile opportunities to wriggle out of the DIY, or renegotiate key issues around your separation. And preventing that was, of course, the point of getting an agreement in the first place.

Filed Under: Postcards From the Trenches Tagged With: #DIY, #familylaw, #protips

Contact Us

1177 Fort Street, Victoria BC V8V 3L1

Phone: 250-999-8966
Fax: 250-999-8960
Email: reception@breakwaterlaw.ca

Categories

  • Business Law
  • Family Law
  • On Litigation – a Litigator's Blog
  • Postcards From the Trenches
  • Uncategorized

Recent Posts

  • New Requirements for BC Employers Posting Jobs
  • So you won in court…but how to collect?
  • Shared Custody and Social Distancing: Staying Connected, Apart
  • A Primer on Estate Documents
  • On Going Back to Your Maiden Name

Tags

#businesslaw #DIY #employmentlaw #familylaw #litigation #protips

Contact Us


We have moved back to our head office:

1177 Fort St., Victoria BC V8V 3L1
(corner of Fort and Linden)
Phone: 250-999-8966
Fax: 250-999-8960
Email: reception@breakwaterlaw.ca

Instagram: @breakwaterlaw.ca

Copyright © 2025 · All Rights Reserved · Designed by See/Saw

Copyright © 2025 · breakwater on Genesis Framework · WordPress · Log in