In a recent eNews article Chris took Dan to Small Claims court and got a payment order for Dan to repay a $7000 loan, but Dan didn’t pay. When they went back to court for a payment hearing, Chris was ordered to make payments of $500 a month. He paid for a while and then stopped. What can Chris do now to collect the balance still owing?
Chris (the creditor) can bring the matter back to the BC Provincial Court’s Small Claims court for a default hearing where a judge hears why Dan (the debtor) hasn't made payments and decides what the consequences should be. This eNews explains what happens at a default hearing.
A creditor like Chris can bring a matter back to court for a default hearing under Small Claims Court Rule 13 if a judge has ordered a payment schedule after:
and the debtor hasn’t made the payments ordered.
Chris would ask the court for a default hearing by filing a Form 14 Summons to a Default Hearing with the court and serving it on (delivering it to) Dan. As a creditor, Chris can list on the Summons form the documents he wants Dan to bring to the hearing.
These records may include:
It is important for a creditor to request all the financial documents they think may reveal the debtor’s real financial circumstances. It is also important for a debtor to provide as much financial information as possible - they need to show why they were not able to make the payments ordered. The judge needs to see the debtor’s financial documents to make a fair order. If a debtor like Dan does not bring enough information to court, then the judge may reschedule the hearing for another day and order them to bring specific evidence or documents for the next hearing.
Dan should give a copy of his financial documents to Chris far enough before the hearing for Chris to review them. Then Chris can prepare questions to ask Dan at the hearing, and they can discuss whether they can agree on a revised payment schedule that the judge could order without hearing any evidence.
Chris and Dan should go to the front of the courtroom when their names are called and state their names. If there's no agreement, Chris should tell the judge about:
As the creditor, Chris will also have a chance to question Dan about his financial circumstances and why he has not been able to obey the payment schedule.
Dan should make sure he has 3 copies of his financial documents – one for himself, one for Chris, and one for the judge to review. As a debtor, after he takes an oath or affirmation to tell the truth, Dan will need to provide evidence of any payments made to Chris. A debtor must explain any change in circumstances since the payment schedule was set that prevented them from making scheduled payments. A debtor should also tell the judge what efforts they made to comply with the payment schedule and why those efforts failed.
A debtor needs to satisfy the judge they made all reasonable efforts but were not able to pay due to some change in circumstances beyond their control. After Dan testifies and Chris questions him, both parties will have a chance to sum up and tell the judge what order they think the evidence justifies.
At the completion of a default hearing, the judge may:
The judge may also imprison a debtor for a specified period of not more than 20 days if the debtor has not obeyed a payment schedule and the judge considers their explanation, or failure to give an explanation, to amount to contempt of court. Imprisonment in jail does not cancel the amount owed.
If a debtor is in default under a payment order, the creditor may also try other forms of enforcement such as seeking a court order for the seizure and sale of the debtor’s property (using Form 11 Order for Seizure and Sale) or for garnishment of money owed to the debtor.
For more information see How to enforce a Small Claims Court Payment Order with a payment hearing and Getting Results, one in a series of Small Claims How-To Guides on the BC Ministry of the Attorney General website.