Debt Collection - Basics
I need a debt collected, where do I start?
Debt collection always starts with some sort of demand for repayment. This can be done by yourself, or by a lawyer. Often, a demand letter from a lawyer is more effective because the debtor knows you’re taking the debt seriously.
If the debtor has refused to pay or won’t respond to your requests for payment, you can seek a judgment through the British Columbia Courts. Depending on the value, a small claims action or Supreme Court action will be started. A lawsuit is often the most effective way to negotiate a repayment plan that is agreeable to both parties. However, it may take a court judgment to convince the debtor to pay.
How long do I have to sue the debtor?
Civil litigation in British Columbia is governed by the two-year limitation period. With some exceptions, you must begin the lawsuit within 2 years of the date the amount became due and payable (depending on the type of debt, this date may vary). If the debtor responds to a demand for payment and acknowledges the debt, the limitation period may also be restarted.
If you have demanded repayment and are within the two-year limitation period, you can pursue the debt in court. The debt can be pursued at the Provincial Court level (also known as the Small Claims Court) or the Supreme Court level. The Provincial Court of British Columbia can only make awards for debts up to $35,000. Debts exceeding $35,000 must be collected through the British Columbia Supreme Court.
Once a judgment has been made, the creditor has 10 years to collect the payment before the judgment expires (options to renew the judgment exist and may be used to extend this period beyond the 10 years).
I know the debtor has significant assets, what can be done?
The court can issue a writ of seizure where a court bailiff is hired to determine which assets may be liquidated to pay the debt owing and proceed to obtain a sale of those assets.
If you have further questions or require personalized advice, don’t hesitate to reach out to one of our litigation lawyers who deal with these types of claims often.
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© Albert & Co. Law LLP. The contents of this article do not constitute legal advice. Readers should seek legal advice in relation to their own specific circumstances.