Garnishment in Alberta: How Business Creditors Turn a Judgment Into Cash From Bank Accounts and Receivables
A judgment is a piece of paper. Garnishment is how that paper becomes money.
Of all the tools Alberta gives a creditor to enforce a judgment, garnishment is the one that most often produces an actual deposit. Seizing equipment takes time, costs money, and depends on the equipment being worth something. Registering against land only pays out when the land sells. Garnishment goes directly to where a debtor's money already is: sitting in a bank account, or owed to the debtor by its own customers. The court redirects it to you.
For business creditors, garnishment is also the tool most likely to be underused. It has a reputation as something that happens to individuals' wages, and the mechanics feel technical. In practice the process is well defined, the timelines are short, and a creditor who understands how it works holds a decisive advantage over one who files a judgment and waits.
What garnishment actually does
Garnishment intercepts money that a third party owes to your debtor and redirects it to the court, which then pays it out to you. The third party is called the garnishee. In a business collection, the garnishee is usually one of three things:
The debtor's bank, which owes the debtor whatever sits in its deposit accounts.
The debtor's customers, who owe the debtor money on unpaid invoices.
Anyone else with a payment obligation to the debtor, such as a contractor holding a holdback, a company that bought assets from the debtor on terms, or a landlord holding a deposit.
The garnishee is not being punished and is not being asked to take sides. It is being told, by court process, that money it was going to pay the debtor must be paid into court instead. Most garnishees comply promptly, because the alternative is exposure to the debt themselves.
Step one: the writ of enforcement
Garnishment cannot begin until the judgment is converted into a writ of enforcement. The writ is issued by the court that granted the judgment and then registered at Alberta's Personal Property Registry. That registration is what gives the writ its force: it puts the debtor's creditors, buyers, and lenders on notice, and it is a prerequisite to almost every enforcement step that follows.
The writ has a life of its own. It expires after two years unless renewed, and it must be kept current whenever payments are received or the amount owing changes. A writ allowed to lapse does not just stall enforcement; it can cost the creditor its place in the distribution scheme described below.
Step two: the garnishee summons
With the writ registered, the creditor files a garnishee summons with the court, supported by an affidavit setting out the judgment, the amount owing, and the creditor's belief that the named garnishee owes, or will owe, money to the debtor. The summons is then served on the garnishee.
From the moment of service, the garnishee is bound. Within fifteen days it must do two things: serve a copy of the summons on the debtor, and deliver a response to the clerk of the court. The response either includes the money the garnishee owes the debtor, up to the amount of the summons, or states that the garnishee owes the debtor nothing and why.
A garnishee that ignores the summons does so at its peril. The court can hold it liable for the amount it should have paid in. This is the reason banks and established businesses respond reliably: the risk of paying twice is real.
How long a summons stays in force
The duration of a garnishee summons depends on what it attaches, and the differences matter for strategy:
A bank deposit account: the summons is effective for sixty days from issue. Anything in the account at the moment of service, and anything deposited during the sixty days, is caught up to the amount of the debt. A joint account is a one-time catch only.
Other obligations, such as receivables owed by the debtor's customers: the summons lasts one year from issue, capturing payments as they come due through that period.
Employment earnings: two years, with statutory exemptions protecting a portion of an individual's wages. This category rarely applies to corporate debtors, but it becomes relevant when a creditor holds a judgment against a personal guarantor.
Every category can be renewed, and there is no limit on the number of renewals. A summons on a customer receivable that keeps paying month after month can be maintained indefinitely.
Bank garnishment: why timing is everything
There is no exemption protecting a corporate debtor's bank balance. Whatever is in the account when the summons is served, up to the judgment amount, is paid into court. That makes bank garnishment the single most powerful move available against a debtor that is still operating and still banking.
It also makes timing the whole game. A summons served the day before payroll, or the morning after the debtor's biggest customer pays, catches a full account. The same summons served the day after payroll catches nothing, and the debtor now knows exactly what you are doing.
Two practical habits make the difference. First, know where the debtor banks before you file. Payment history, cheque copies, and electronic transfer records from the original credit relationship usually tell you. Second, think about the debtor's cash cycle. A business that invoices at month end and collects mid-month has a predictable high-water mark, and a well-timed summons is served just after it.
Receivable garnishment: the move debtors do not see coming
Garnishing a debtor's bank account is direct. Garnishing its customers is often more effective, because it reaches money before it ever enters an account the debtor can drain.
The creditor serves a summons on a customer of the debtor, often several, that it has reason to believe owes the debtor money. Each customer must then pay what it owes the debtor into court rather than to the debtor, for the life of the summons. The debtor discovers this when its own receivables stop arriving.
Beyond the money itself, receivable garnishment changes the debtor's incentives. A debtor that can tolerate a frozen bank account for a few weeks usually cannot tolerate its customers being served with court documents about its unpaid debts. Reputational pressure, combined with the interruption to cash flow, turns many stalled files into negotiated payments within days.
The information problem is the only real obstacle. You have to know who the debtor's customers are. Delivery records, the debtor's own marketing, industry knowledge, and the examination process available to judgment creditors are all ways to find out.
What happens to the money once it is paid in
Money paid into court under a garnishee summons is not simply handed to the creditor who served it. Alberta operates a distribution system: funds recovered through enforcement are shared among the creditors who hold writs registered against the same debtor, generally in proportion to the amounts owed to each, after enforcement costs. Funds are held for a short period after the debtor is served so that objections can be raised, and are then distributed by the clerk.
For creditors, this has a consequence that is easy to miss. The creditor who did the work of locating the bank account and serving the summons does not necessarily get all of the proceeds. Other creditors with registered writs share in the recovery. That is not a reason to skip garnishment; it is a reason to register your own writ promptly against any debtor others may be pursuing, because an unregistered judgment shares in nothing.
The five conditions of a successful garnishment
Most garnishments that fail do so for one of five reasons, and each is within the creditor's control:
The writ was not registered, or was allowed to lapse. Everything downstream depends on it.
The wrong garnishee was named. The bank the debtor used three years ago, or a customer whose contract ended, produces a nil response.
The timing was wrong. An empty account on the day of service is a lost opportunity and a tipped hand.
The debtor's legal name was wrong. A summons naming a trade name instead of the registered corporation can be answered with a denial that the garnishee owes anything to that entity.
The creditor stopped after one attempt. A nil response is information, not a conclusion. Renew, redirect to a different garnishee, and keep going.
Frequently asked questions
Can a business creditor garnish a corporate debtor's bank account in Alberta? Yes. Once a judgment has been converted to a writ of enforcement and registered, the creditor can serve a garnishee summons on the debtor's bank. There is no exemption for corporate accounts, and the bank must pay into court whatever is in the account, up to the amount of the debt.
How long does a bank garnishment last? A summons served on a deposit account is effective for sixty days from issue and catches funds present at service and deposited during that period. It can be renewed without limit.
Can I garnish money that my debtor's customers owe to it? Yes. A garnishee summons served on the debtor's customer requires that customer to pay what it owes the debtor into court for the life of the summons, generally one year, renewable. This reaches money before the debtor receives it.
Do I need to garnish before I can seize the debtor's equipment? No. Garnishment and seizure are separate tools, and a creditor with a registered writ can use either or both. Garnishment is usually faster and cheaper, which is why it is often tried first.
If I garnish the account, do I get all the money? Not necessarily. Alberta distributes enforcement proceeds among creditors with writs registered against the same debtor, generally in proportion to their claims. A creditor who has not registered a writ shares in nothing, which is why prompt registration matters.
The bottom line
Garnishment is where enforcement stops being theoretical. A registered writ and a well-aimed summons can take a debtor's cash out of its bank account or out of its customers' hands within weeks, with no auction, no appraisal, and no waiting for a property to sell.
The creditors who make it work are the ones who treat it as an intelligence exercise rather than a filing exercise: they know where the money is, they know when it will be there, and they keep the writ current so they are in line when it is paid out. Everyone else holds a judgment and waits.