Civil Enforcements Guide: The Personal Property Registry
Before You Start: The Personal Property Registry
Before getting started with any civil enforcement, the first step is to determine whether or not the effort and money you invest in the process is worth it. The civil enforcement process can take a long time, and you will have to put some money in before getting any money out of it.
It is important to first determine whether or not your debtor is worth chasing, including considering the following:
- Is the amount of the judgement large enough to put your time, effort and dollars into enforcing?
- Does the Debtor have or will the Debtor have the funds to pay you back? If the Debtor doesn't have the realistic ability pay the judgement, then no amount of enforcement will be effective.
- Who else has claims against the Debtor? If your Debtor owes money to many parties your claim priority may be low, and if the Debtor has insufficient funds to pay all owed Creditors, then cost of enforcement may not be worth it.
The Personal Property Registry
Before proceeding with any enforcement, first check the Personal Property Registry through an Alberta Registries Agent to determine whether or not any other claims have been made against the Debtor.
The Personal Property Registry is the Alberta Government agency that keeps track of claims made against people's assets. By registering your claim — such as an unpaid court judgement — you protect your claim and link it to the assets and property of the Debtor. This means that if their property is seized and sold off or their wages garnished, you will share in some percentage of the proceeds, depending on whether your claim is secured or unsecured, and on your Creditor precedence.
It is important to know that, when you initiate enforcement proceedings against a Debtor, you are taking this action on behalf not just of yourself, but of all creditors owed.
Secured and Unsecured Claims
You will need to register your claim against a debtor with the Personal Property Registry in order to use enforcement proceedings such as seizures or garnishee. Any proceeds from a Debtor's assets will be shared only by the registered Creditors.
There are two different kinds of claims against assets: secured and unsecured.
Secured claims are those that specifically mention assets of the debtor, such as a loan from a bank that is secured upon a person's assets, or a sales contract where a vehicle or TV is owned by the seller until it is completely paid for in a series of installments.
Unsecured claims include most court judgements. Because these judgements do not relate to specific assets, they almost always fall behind secured claims in payment priority.
Order of Payment: Who Gets Paid First?
There are laws surrounding which creditors get paid in what order when a debtor is garnished or his property seized and sold. In general, the order of payment for more civil enforcement claims are:
- First, the Instruction Creditor will receive costs involved in obtaining the money. The Instruction Creditor is the debtor who has begun the collection process. These costs must be proved by a taxed Subsequent Bill of Costs, which is a form that must be submitted to the Court Clerk. The costs that can be claimed are outlined in the Alberta Rules of Court.
- If there are statute claims such as from the Workers Compensation Board or Maintenance Enforcement claims, these are paid out first.
- If there are no relevant statute claims, then the first $2,000 of the collected funds will go directly to the Instruction Creditor who initiated the collection process, unless there are secured claims that take precedence depending on the secured creditor and the assets involved.
- The rest of the funds will then be divided on a pro-rated basis between all unsecured creditors with remaining Writs.
So, even if you begin the enforcement proceedings as an unsecured creditor, your claim will likely rank BEHIND any registered secured creditors. This is important for you to know before beginning any enforcement processes, because if the debtor has insufficient assets and funds to pay both the secured and unsecured creditors, even though you paid for the enforcement process you may not receive much or any share of the final proceeds.
Always carry out a search with the Personal Property Registry before putting enforcement proceedings into motion. If your search on a debtor shows that there are already other secured and/or unsecured creditors with registered claims, the cost of enforcement might not be worth what you could realistically gain from the process.