In debt claims, winning a judgment is only part of the challenge. A lawsuit is only valuable if you can ultimately collect what you are owed. If the debtor has moved or spent their money before the case is decided, even a successful judgment may be difficult to enforce. For that reason, British Columbia law provides creditors with a powerful remedy known as prejudgment garnishment. In the right circumstances, it allows you to freeze money held in the debtor’s bank account before the court determines who ultimately succeeds in the lawsuit.
I. What Is Prejudgment Garnishment? When Is It Available?
A prejudgment garnishing order is a court order from a court registrar directing a bank to freeze money held in a debtor’s account and pay those funds into court. The money remains protected until the litigation is resolved or the court orders otherwise. Because the order is usually obtained without advance notice to the debtor, it prevents the debtor from withdrawing or transferring funds before the bank receives the order. This element of surprise is often what makes prejudgment garnishment such an effective recovery tool.
Prejudgment garnishment is not available in every case. It is intended for claims involving a debt or other liquidated demand. In other words, it is available where a fixed amount of money is already due and can be determined through a straightforward calculation. Common examples include unpaid loans, unpaid invoices, amounts owing under written contracts, and other fixed payment obligations. If, however, the amount claimed depends on you proving damages, estimating losses, or resolving disputed calculations, your claim may not qualify for prejudgment garnishment.
II. How Does the Process Work?
In many cases, as the creditor you can apply for a prejudgment garnishing order as soon as you sue. Your application must be supported by an affidavit confirming, amongst other things, the nature of the claim; the exact amount owing after all proper credits and deductions have been made; and the financial institution and branch where the debtor’s account is believed to be held.
You must also identify the correct bank branch, and this is essential for this remedy to work. In practice, this information is often obtained from previously issued cheques, bank statements, electronic transfer records, prior business dealings, or other reliable sources. Keep in mind that it is absolutely critical to identify the specific bank branch where the debtor holds their account. Identifying the correct branch is essential. Under the applicable court rules, the garnishing order must identify and be served on the financial institution in the manner required by the Rules. If the wrong branch is identified, the order may not attach to the funds and the application may ultimately prove ineffective. Once the order is issued and served on the bank, any funds that the order attaches to are frozen and paid into court pending the outcome of the litigation.
III. Will the Order Always Recover Money?
Not necessarily. The garnishing order only reaches funds that are available in the account when the order is served. If the account has little or no balance, or if the bank has a prior claim to the funds because the debtor owes money to the bank, there may be little or nothing available to garnish.
IV. Is Your Claim Eligible?
Thus, time is often an acute risk for creditors. Once a debtor becomes aware of a lawsuit, assets can sometimes be transferred or depleted before judgment is obtained. Prejudgment garnishment helps reduce that risk by preserving available funds at the outset of the litigation. In the right case, it can significantly improve the likelihood of collecting a judgment and may also encourage an earlier resolution of the dispute. If you are owed a fixed amount of money and are considering legal action, prejudgment garnishment may be available to protect your interests before the case reaches trial.
Early legal advice is important. Prejudgment garnishment is often the first strategic decision made in a debt recovery action. It is not appropriate in every case, and careful planning is required before an application is made. In many cases, whether the remedy is available will influence how the lawsuit is articulated, what evidence is gathered before filing, and when proceedings are commenced. Acting quickly can significantly improve the prospects of recovery.