Seizing assets

INTRODUCTION

Once a Creditor has succeeded in obtaining a Default Order or Payment Order, it is still up to the Creditor (not the Court) to actually collect the money owed to the Creditor by the Debtor.

This factsheet will tell a Creditor how to go about having assets of a Debtor seized and sold to pay the debt owed. Any assets (except real property) can be seized by the procedure described in this factsheet. The usual things seized include motor vehicles, boats, furniture, personal belongings and shares in companies.

This factsheet will also tell a Debtor what rights a Debtor has when his or her assets are about to be seized or have been seized.

 

WHAT LAW APPLIES?

The Small Claims Court Rules 11(11), (12) and (13) and the Court Order Enforcement Act apply to seizing assets.

 

OVERVIEW OF THE STEPS TO FOLLOW TO HAVE ASSETS SEIZED

Step 1: Decide Whether It Is Worth Trying To Have Assets Seized

In deciding whether it is worth having an asset seized a Creditor should bear in mind the following:

1. No order to seize assets will be granted if a Judge has already ordered a Payment Schedule (unless the Debtor has failed to obey that schedule);
2. Certain assets of a Debtor are exempt from seizure and sale. These include:

• necessary clothing of the Debtor and the Debtor’s dependants;
• $4,000 for household furnishings and appliances;
• $5,000 for one motor vehicle;
• $10,000 for tools and other personal property of the Debtor that are used by the debtor to earn income from the Debtor’s occupation;
• medical and dental aids that are required by the Debtor and the Debtor’s dependants; and
• any personal property prescribed by the regulations that is of a value not exceeding a prescribed amount.

The value of assets which are exempt relates to the current value, not the new or replacement value. So a TV which cost $5,000 might be worth less than the household furnishings exemption of $4,000 if it were to be seized and sold by a sheriff.

3. A Debtor may be the legal owner of an item, like a car. But the item may have been used as security for a loan. If the item is seized and sold, the lender will usually be paid out first. If there is money left over, that money will be paid to the Creditor.

If an asset is worth more than the exemption amount it can be seized and sold. The money from the sale would first go to a secured creditor if the secured creditor has, at the time of seizure, a financing statement registered under the Personal Property Secuity Act. Next, the Debtor would get up to $5,000. The balance would go to the Creditor who obtained the order for seizure and sale. For example, suppose the Debtor owns a car worth $13,000 on which there is a secured loan of $6,000 owed to the bank. If the car is seized and sold for $13,000, the bank will get the first $6,000, the Debtor will get the next $5,000 and the balance of $2,000 will go to the Creditor.

4. Things owned jointly by the Debtor can not be seized unless there is a Payment Order against both joint owners of the item. In practical terms, when a Sheriff or Court Bailiff is told by a Debtor that the item seized is owned partly by someone else, the item won’t be seized if the other person will swear an affidavit that they are a co-owner. Could they be lying? Sure. But how can a Creditor prove it?
5. The Sheriff or Court Bailiff require a deposit to cover their fees. That deposit covers the minimum fee set by the government of $55 plus $35 per hour charged to seize items. In addition the Creditor must pay a commission (which is sometimes called “poundage”) of 10% of the amount the item sells for. However, the amount of the commission payable must be reduced by 50% if an auctioneer, broker or other individual sells the goods and chattels for the sheriff and receives a fee or commission for doing so.

If no items are seized, or the items are covered by loans, the Creditor may not get back the deposit money to cover the cost of the seizure.

6. The Order which allows items to be seized is called an Order for Seizure and Sale. It does not allow a Sheriff or Court Bailiff to enter locked premises to seize assets. A car sitting on a driveway will be seized. The same car in a locked garage will not.

 

Step 2: Find Out What The Debtor Owns

The first thing a Creditor must do is find out if the Debtor has anything worth seizing. If a Creditor does not know what a Debtor owns a good way to find out is to schedule a Payment Hearing. At a Payment Hearing a Debtor can be thoroughly questioned about the assets the Debtor owns. For detailed information about Payment Hearings see Factsheet 16.

To confirm that a Debtor has things worth seizing, Registry checks should be done. For example, currently it is possible to find out if the Debtor owns a vehicle. To do this, a Creditor should write to I.C.B.C. and request that a “name search” be done to see if any vehicles are registered in the Debtor’s name. I.C.B.C. will not do the search unless a copy of the Payment Order is enclosed with the letter and the search fee is included. The fee is currently for each document or extract produced. So, depending on the results, a search could become quite expensive. It would be a good idea to include the Debtor’s address, if known.

ICBC’s address is:

Insurance Corporation of British Columbia
151 West Esplanade
North Vancouver, BC V7M 3H9

Telephone:

Toll free: 1-800-663-3051
Lower Mainland: 604-661-2800

 

Step 3: Do An Encumbrance Check

Another possible way to find out if the Debtor owns anything that might be seized is to do a name search at the Personal Property Registry.

This Registry is really for registering security instruments, liens or other encumbrances against personal property, like cars, boats, furniture etc. But if a Creditor discovers that the Debtor owns personal property, it may be that the property is worth more than the debt it has been given as security for. Thus it may be worthwhile seizing. Indeed, a check should usually be done at the Personal Property Registry before instructing the Sheriff or Court Bailiff to seize an item, just to make sure it is worth seizing.

To do a name search at the Personal Property Registry, a Creditor must first decide what data base should be searched. If the Debtor is an individual, the “individual data base” should be searched. If the Debtor is a partnership, corporation, association, estate, trust, trade union, syndicate, or a joint venture, a “business debtor name search” should be conducted. A search can be done using BC OnLine on your home computer if you have an account with BC OnLine, or at one of the Service BC Offices located throughout BC. See more about personal property searches here.

 

Other Searches

There may be other data bases and registries worth searching. A good source of information about how to do searches is a book called the “Due Diligence Deskbook” published by the Continuing Legal Education Society of BC. It may be available at your local public library or in a regional Courthouse library.

 

Step 4: Prepare A Memo To The Sheriff Or Court Bailiff

Prepare a memo to the Sheriff or Court Bailiff about items that might be seized. A sample of a memo can be found below. The more information you can provide the better. This is because the chance of success in finding the Debtor’s assets is greater and the hourly fee charged by the Sheriff or Court Bailiff can be kept down.

“TO: THE COURT BAILIFF OR SHERIFF

FROM: Wendy Thorpe, Creditor

RE: Items to be seized from Pat Booker, Debtor

I think the following items owned by the Debtor can be seized and sold:

1. A 2002 Nissan Sentra, Licence AAA 123. The car is registered in the name of Pat Booker. A search at the Personal Property Office listed no one else having an interest in the car. The car is usually parked outside Pat Booker’s home at 1616 Station Street, Sidney, B.C. The car is usually there on weekdays before 8:00 a.m. and after 5:30 p.m. 

2. A Martin 242 sailboat. No name is on the hull but the hull number 32 is molded into the transom. A search of the Personal Property Office listed no one else having an interest in the boat. The boat is on “B” dock at the Seaside Marina. The gate to the docks is usually unlocked and open between 9:00 a.m. and 5:00 p.m.”

Step 5. Obtain A Copy Of The Payment Order Or Default Order

Obtain a copy of the Payment Order or Default Order. A copy can be obtained from the Small Claims Court Registry.

 

Step 6. Prepare An Order For Seizure And Sale 

Click here to obtain a form you can use to prepare your own Order for Seizure and Sale.

Complete the form by filling in the following information:

1. the Court Registry file number as it appears on the Payment Order (or Default Order);
2. the Registry location;
3. the name, address and telephone number of the Creditor and Debtor as they appear on the Payment Order or Default Order;
4. in the boxes provided:
   • put in the total amount awarded by the court on the Payment Order or Default Order
   • put in the amount already paid by the Debtor after the words “Less any payments to the creditor”
   • calculate interest and put that in the box provided. The amount of interest allowed is based on a rate set by the government. Click here to view a table containing Court Order Interest Rates.

CALCULATING INTEREST

To calculate the interest due you can use a formula: Amount owing by the Debtor [times] the interest rate [times] (the number of days the debt was not paid [divided by] the number of days in the year).

For example:

– if the debt unpaid is $4,000;
– the interest rate was 8%
– the payment order was made on January 10 and it is now April 15 (that is 95 days)

then the math would be $4,000 x .08 x. 95/365 = $83.28

The way you calculate interest should be recorded on a separate piece of paper. You will give that paper to the clerk at the court registry when you go to the registry to have the Order for Seizure and Sale issued by the Court.

If you have been granted expenses to try to collect the debt in other ways and have been unsuccessful, insert enforcement expenses allowed by the Court to date. For example, costs for Garnishment Orders or Summons to Default Hearings could be added up and listed.

5. Leave the boxes blank after the words “Issued on:”

Your form is now completed and ready to file.

 

FILE THE ORDER

After completing the Order for Seizure and Sale form, attach a copy of the Payment Order or Default Order and the memo to the Sheriff or Court Bailiff. Make a photocopy. Then take the original and photocopy to the Small Claims Court Registry. At the Court Registry the “expenses allowed in relation to the order” part of the form will be completed by the Registry staff. A deposit will be taken from you to cover the Sheriff or Court Bailiff fees.

 

SEIZURE WILL THEN BE ATTEMPTED

The Sheriff or Court Bailiff will be given the Order for Seizure and Sale. They will then attempt to seize assets. If unsuccessful they will write the words “Nulla Bona” on the Order and return to the Registry with the unused portion of the deposit.

 

WHAT HAPPENS WHEN THE SHERIFF OR COURT BAILIFF SEIZE ASSETS?

If successful, the Sheriff or Court Bailiff will advise the Debtor that they have seized the goods and will give the Debtor the opportunity to select goods to be exempt from seizure. The Debtor must do this within two days of seizure or the Sheriff or Court Bailiff will be free to sell the items. If the Debtor selects items and there is a dispute about the value of the items selected for exemption, sections 74 to 78 of the Court Order Enforcement Act provide for a way to have the value of the goods appraised.

At the time of seizure the Debtor will also usually be given the opportunity to pay the debt. If the Debtor does not pay, the goods will actually be taken by the Sheriff or Court Bailiff. The Court Order Enforcement Act requires the Sheriff or Court Bailiff to tell the Debtor about the services of the Debtor Assistance Branch of the B.C. Government. The goods will then be sold by auction or other reasonable means. Assuming the goods have not been used as security for loans and do not have liens on them, the money received from the sale will go first to pay the fees of the Sheriff or Court Bailiff, then toward the amount owed to the Creditor, and the balance, if any, will be paid to the Debtor.

 

Prepared by Glenn Gallins
Revised April 2008, links checked 2019
Funded by the PLE Program of the Legal Services Society