Q.What is a judgment and what is its significance?

A.A judgment is awarded by a civil court. There are two scenarios in which a creditor may obtain a judgment against a debtor. If a creditor sues a debtor and the debtor fails to file a defence in a timely manner a court may award a default judgment in favour of the creditor. In those circumstances where a debtor is sued and the debtor properly files a timely defence the lawsuit may, but not always, proceed to trial. If the creditor is successful at trial the trial judge will award a judgment against the debtor in favour of the creditor for a specific monetary amount.

If you are sued it is important that you immediately seek legal advice in connection with filing a defence. If you do not properly file a defence in a timely manner you run the risk of the creditor obtaining a default judgment against you. Creditors are often in a position that they can provide the court with sufficient documentation to obtain a default judgment but they may lack sufficient documentation supporting their case to win at trial.

Significance of a judgment

The fact that a creditor, now known as a judgment creditor, has obtained a judgment is no guarantee that the creditor will obtain any monies from the debtor, now known as the judgment debtor. However, a creditor with a judgment is able to take advantage of a number of enforcement remedies that are not available to a creditor without a judgment.

Enforcement remedies that are available to judgment creditors vary by province. Few enforcement remedies are available in a number of provinces such as New Brunswick. In most provinces a judgment creditor may be able to garnish a percentage of the judgment debtor's wages and place a lien on the judgment debtor's real estate provided the latter is a legal owner of the property. In most provinces a judgment creditor may be able to seize monies in a judgment debtor’s bank account unless the monies in the account are social assistance benefits.