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→4. Garnishment of Bank Accounts and other Accounts Receivable
Once the execution process has begun, the debtor usually has one final opportunity to pay. In the case of land, the sheriff may not sell until one month after receiving the order for sale (COEA s 100). The debtor should be advised to pay if possible because the amount recovered on a forced sale may not be as high as otherwise obtained on a normal sale of property.
=== 4. Garnishment of Bank Accounts and other Accounts Receivable ===
=== 5. Garnishment is a judicial proceeding in which a creditor asks the court to order a third party who is indebted to the debtor to turn over to the creditor any of the debtor’s property. The creditor is the garnishor. The third party is the garnishee. The ''COEA'' provides that Bank Accounts and other Account Receivable === ==== a garnishing order may be obtained before or after judgment. ) Garnishment Before and After Judgement ====
A pre-judgment garnishing order is paid into court pending the outcome of the proceedings, and may be used in circumstances where the debtors ability to pay may be compromised before judgment. A pre-judgment garnishing order is not available against wages. The creditor’s action against the debtor must be for a liquidated (i.e. explicitly specified) or ascertained sum. E.g. - damages for a breach of contract must be quantified as a term of that contract (see ''Gibbons Ocean Floors Ltd v Specialty CarsCrocan Construction Ltd'' (27 January 19892010), F.5885590 (BC County Ct.)2010 BCSC 409). A definition of liquidated sum is found in ''Hydro Fuels Steele v WilderRiverside Forest Products Ltd'', [1968] 1 OR 169 at 276 (HCJ2005), 2005 BCSC 920. The accompanying affidavit to a pre-judgment garnishing order must disclose the nature of the cause of action and the specified amount claimed. Note that recourse to a pre-judgment garnishing order is extraordinary and therefore the provisions of the ''COEA'' must be strictly complied with or it may be overturned. The creditor will generally swear an affidavit in support of a pre-judgment garnishing order by himself or herself.
A creditor who begins an action for a liquidated sum may seek to garnish a debt owed to the debtor to have the money paid into court to “ensure” payment if the creditor is successful in court. However, remember other judgment creditors may also be trying to ensure payment.
Any debt that is “due or accruing due” to a judgment debtor may be garnished by a judgment creditor. This requires that the debt be an existing or perfected debt even though payment is not yet due. Bank accounts can be garnished as long as it is not a joint bank account, except where the debt is owed jointly by the same parties or the creditor is exercising its right of offset. For example, a creditor bank may garnish a debtor’s personal account, including a joint account, to offset the debtor’s debts to that bank. Term deposits may be garnished as long as any conditions on withdrawal are mere matters of procedure and administration, though there may be complications where the account is transferable.
'''Registered plans such as RRSPs and RRIFs are exempt from enforcement processes under section s 71.3 of the ''COEA''. ''' However, the debtor may lose any contributions made within in the previous 12 monthspreceding the date of judgment may be enforced on.''' Also, many pension plan payments are exempt pursuant to s 63 of the ''Pension Benefits Standards Act''. Section 15 of the ''COEA'' provides that a creditor may seek a garnishing order that will attach a debt maturing in the future. This form of garnishing order may be useful in attaching monthly payments, since all future monthly payments can be attached by one order rather than issuing a garnishing order for each payment.
==== c) Procedure for Pre-Judgment Garnishing Order ====
In order to obtain a pre-judgment garnishing order, a civil action must first be commenced by a creditor for the amount of the debt. The creditor must swear in an affidavit that an action on the debt is pending, provide the date of its commencement, the nature of the cause of action, and the actual amount (i.e. liquidated or ascertained sum) of the debt, claim or demand, and that the same is justly due and owing. The affidavit may be sworn before or after the action is commenced (although the form of the affidavit will differ). The affidavit must also state that another person, the garnishee, is indebted to the debtor, and provide the garnishee’s residential address (''COEA'', ss 3(2)(e) and (f)).
The garnishing order may be set aside if the procedural requirements are not strictly complied with because it is considered an extraordinary remedy. For example, a pre-judgment garnishing order will be set aside where the affidavit in support sets out an amount including interest and the affidavit does not allege the existence of an agreement on the part of the debtor to pay interest: see ''Nevin Sadler-Brown Goodbrand Ltd. v Adola Mining Corp. and Prophecy Developments Ltd.'' (1988), 24 BCLR (2d) 341. '''Never''' claim court ordered interest in the affidavit.
The court has discretion to set aside a pre-judgment garnishing order, but the applicant must submit a meritorious set-off claim or show extraordinary hardship arising out of the garnishment. While there is some conflicting law regarding whether the plaintiff’s solicitor may swear in an affidavit as to what is the amount owing (see ''Caribou Construction v Cementation Co (Canada)'' (1987), 11 BCLR (2d) 122 (SC); ''Trade Fortune Inc v Amalgamated Mill Supplies'' (1994), 89 BCLR (2d) 132 (SC)), most practitioners prefer never to swear an affidavit to support a pre-judgment garnishing order. Whenever possible, the plaintiff should swear the affidavit: see ''Samuel and Sons Travel v Right on Travel'' (1987), 19 BCLR (2d) 199. The remaining procedure is the same as for post-judgment garnishing orders (below) except that the court retains the money pending the action’s outcome.
==== d) Procedure for Post-Judgment Garnishing Order ====
*a) that a judgment has been recovered;
*b) the amount that is unsatisfied;
*d) the address of the garnishee’s residence in the jurisdiction (s 3(2)).
The affidavit is filed in the court registry along with the form of order requested. Barring any technical problem resulting in the registry declining to issue the order, the garnishing order will usually be issued on the same day. The garnishee is then to be served with a copy of the order, which commands him or her them to pay the money into court. A copy of the order is then must be served on the debtor as soon as possible after at once, or within a time allowed by the judge or registrar by memorandum endorsed on the order . Failure to serve a garnishing order on a debtor “at once” may result in the garnishing order being set aside. Whether delayed service is fatal to a garnishing order depends on the garnisheecircumstances of each case. See ''Skybound Developments Ltd. v. Hughes Properties Ltd.'' (1985), 1985 CarswellBC 219, 65 BCLR 79 (CA) for a discussion on this topic. The garnishee may dispute indebtedness to the judgment debtor (see [[Introduction to Debtors%27 Options (10:III)#B. Legal Advice for Debtors Who are Garnished | '''Section IIIII.B: Legal Advice for Debtors Who are Garnished]]''', below). Where the garnishee pays money, the court keeps the money until it is paid out to the judgment creditor under ss 11, 12, and 13.
Funds held jointly to the credit of the defendant and another person, who is not a party to the action, cannot be garnished, except where a creditor bank exercises its right of offset: see ''238344 BC Ltd. v Patriquin et al'' (1984), 57 BCLR 224.
==== e) Payment by Instalments ====
A debtor against whom a garnishing order has been made may apply for a release of the garnishing order, and for an order for the payment of the debt by instalments on the basis of hardship (see ''Bank of Montreal v Monsell'' (1994), 58 BCLR 11 (SC)). This order, if granted (it is rare), will bind the debtor’s creditors, but will only continue for as long as the debtor is not in default on any payment for more than five days, and so long as no other garnishing order is issued against him or her for any other debt (s 5). The creditor may apply to have the order varied if new evidence of the debtor’s finances comes to light.
=== 5. Garnishment of Wages ===