Judgements, Liens and Garnishments in Canada – No Need to Panic

Category: Personal Bankruptcy (14) comments


Knowing your rights is always important, whether in good financial times or bad.  It is important to remember that no matter what, life will go on. This is also true with something that seems so final like a judgement, lien or even a wage garnishment.

Even if a creditor gets a judgement against you, it does not mean that you will be at their mercy forever.  In a bankruptcy or a consumer proposal all your creditors’ actions against you are stopped one you file the paperwork.

This means that even if they have gotten a judgement against you, by filing a bankruptcy or consumer proposal, they cannot take any new actions, and all their old actions are also stayed at the date of filing.  Once the bankruptcy or proposal is completed, any seizure, garnishment, or lien are completely taken away.

Remember, before a judgement can be enforced, there is usually a delay period that the creditor must wait, so you have a little bit of time to get things in order.  These delay periods will vary depending on the type of action and the province you are in. To find out more, speak with a trustee close to you.

If a creditor has already taken action, perhaps they have already started a wage garnishment, a bankruptcy or proposal can stop the garnishment almost immediately. As soon as you file, your trustee will notify your employer and they can remove any garnishment that has not yet been processed by the payroll department.

The only lien that will survive after a bankruptcy or proposal is if it is filed by Canada Revenue Agency (or in Quebec, Revenue Quebec), because a lien against property you own once it is filed by CRA cannot be removed by a bankruptcy or proposal. However, if you owe money to CRA and they have not yet filed a lien, then those tax debts can be included in your bankruptcy or proposal which will stop any future actions.

If someone has obtained a judgement against you, or used a judgement to get a seizure lien or garnishment against you, contact a Trustee right away, to see what you can do!

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  1. R.M. Robinson

    Manitoba Public Insurance got a court judgment against D. in 1989. It was never renewed. D. made small sporadic payments until 2019. Is the Judgment enforceable? When replying, please cite applicable law.

    1. Ted Michalos

      Sorry, we are insolvency practitioners, not lawyers. I suggest you contact the Law Society and ask them whether the judgment is enforceable.

  2. Dean Meisner

    I have two judgements registered in Nova Scotia one from Scotia Bank from Dec. 15, 1999 and another with NS workers compensation against me. I filed personal Bankruptcy with KPMG in New Brunswick in 2002 and was discharged in 2003. Both of these judgements were from a failed business and both were covered in the bankruptcy. Both took the judgements and related accounts off of my credit report in 2003.
    Last week I tried to buy a house and my lawyer found these judgements still registered at the land office. What can I do to get rid of them? I don’t have the paperwork from the original bankruptcy and KPMG doesn’t have them after 10 years either. I tried to get copies from the Superintendent of Bankruptcy office but they said they destroy them after 10 years also. I do have the file number as well as the court file numbers and my copies of my credit reports from after my discharge as KPMG instructed that I order to check for mistakes. Neither of these judgements ever show up on any of my credit reports even to the present date.
    Is there something or someone I can contact to help get this resolved?
    Thank you for any response

    1. Ted Michalos

      All you can do is find out exactly from the Land Registry Office what they require in order to remove the judgments. I suspect the simplest thing will be to request a current Writ/Judgment search from the nearest Court House. If the items do not appear on the Court systems’ records then the land Office should accept that as proof and remove them. Good luck.

  3. Gerry

    I have just been denied my LTD claim because they say I work, which is false. I live on a farm and they claim I work for my spouse because she runs a business on the property. My disability does not allow me to be able to work, they just make claim. We have only been married 2 years and now I fear for my wife losing her property. They are claiming I owe them over 200K because of overpayments for 7 years. No judgements have been made, but this stress is cause many issues in my life. Can they take my wife property if they win judgement?

  4. suconne saunders

    I have a question regarding small claims court in Ontario. I Barrow 3500 dollar from a friend she took me to court. I have lost my job in January so I’m not able to make the payments until I have secure employment. I received a email from her yesterday that she will be placing a lien on my car for 2800. I’m panicking is there any one that really understands about lien my car is older car 2006 Honda. I bought outright. Can she take away my car

    1. Ted Michalos

      No she cannot. She can’t even place a lien on your car unless she loaned you the money to buy the car in the first place. She can take you to Court and get a judgment that will allow her to garnishee your wages if you are working and/or seize your bank account, but she can’t simply put a lien on your car.

  5. Marie

    Having declared joint bankruptcy back in 1998 with my former spouse, I hope to avoid it again as I don’t want a 14 yr stain on my credit file. I’d like to do a proposal instead.
    Two issues though – one is that most of my income is from CPP (I have a small business that helps me pay bills) and the other issue is I’ve heard Royal Bank turns down proposals often and they do have a writ/judgement on my home which is due to expire in 2021. Can I fight a renewal?
    Also I have approx $113k left on the mortgage but the cost to sell and move and with $10k allowable equity I wonder if I did have to go bankrupt, would I have to sell my home?
    By the way, they aren’t my only creditor. I owe them 15k and there is another 15-18k in debt spread amongst various creditors so I wonder if their vote would count less against other creditors if they voted a yes.
    Can you help clarify that n these points/questions please?
    I feel like I’m really stuck with no real option, except for a consumer proposal acceptance.

    1. Ted Michalos

      First, RBC often counter offers with consumer proposals – that means they ask for a higher monthly payment. They rarely reject a proposal outright. The starting offer should be 1/3 of your debt or as much as they may receive in a second bankruptcy. Every dollar you owe is a vote and if RBC represents less than half of the total unsecured debt then the other creditors may out vote them anyway…

      The Writ in and of itself does not complicate a proposal – once you file the writ is “stayed” (cannot be enforced) and once the proposal has been completed the debt is gone so the Writ is void. The lawyers may try and charge you a fee to remove the Writ, but it won’t be a big number and it is negotiable.

      If you do end up in a second bankruptcy then your creditors are entitled to your share of the equity in your home. If you can afford to make monthly payments to cover your equity then the house won’t have to be sold. If you cannot then it may very well be seized and sold for the benefit of your creditors.

      You’ve got enough going on in this post that you really should call a licenced insolvency trustee to discuss your situation and your options.

  6. Cat

    Hi, I have a deficiency judgment from a previous property 20 years, would I be able to get a new mortgage without getting lien against the new property.Thank you

    1. J. Douglas Hoyes

      Hi Cat. That would depend on whether or not there was a judgement against you for the deficiency, and whether or not it appears on your credit report. I would suggest you start by reviewing your credit report, and then talking to a real estate lawyer to see if there are any potential issues.

  7. Nafisa

    Dear Sir,

    I have a MIF Deficiency Judgement against me since 2016. It appears in my CRA profile as well. How long will this stay in my CRA records? Thank you.

    1. Ted Michalos

      Likely until it has been dealt with… Judgments expire, but may be renewed so if they want the Judgment to remain it will until it has been cleared by payment or some form of insolvency procedure.


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