Wednesday, July 06, 2022

Thoughts regarding collecting from defamation defendants -- some personal musings.

Having perused the recent legal beatdown of malicious defamer Chelsea Hillier by one Esther Post, it occurred to me and others that Hillier -- one of those yammering right-wing asshats who is constantly bleating on about "accountability" and "personal responsibility" and the like -- might, like Lloydminster's Patrick Ross before her so many years ago, just refuse to hand over the nearly $100K in damages and costs she now owes and take the conservative's way out by simply filing for bankruptcy, thereby sticking society with the bill.

That is what Patrick did but, fortunately for me, he so thoroughly ignored his obligations under Canada's bankruptcy regime that I managed to have him effectively booted out of bankruptcy, to the point where my original 2010 judgment of $85,000 was re-instated and is now accruing interest at the rate of 5 per cent per year. So what advice might I give Ms. Post? I'm glad you asked.

Sadly, if Hillier truly has no assets, she can legally file for bankruptcy, probably get a conditional discharge order, have to pay some portion of that nearly $100K, then turn around and put her miserable defamatory life back together. Or can she? Not so fast.

Over the years, your humble scribe has become depressingly familiar with Canada's Bankruptcy and Insolvency Act (BIA), and there is a section that I (admittedly a non-lawyer) think might be relevant here:

The above is the BIA's definition of an "insolvent person"; that is, one who should be eligible to file for the protection of personal bankruptcy, but let me bring something to your attention, that being the highlighted portions.

Note that, under normal circumstances, if Hillier now owes almost $100,000 but has precious little in the way of assets and only a menial minimum wage job, one would assume she would be able to file for bankruptcy. However (and, again, just my personal speculation), note that the definition of insolvency requires that the applicant needs to be unable to pay debts as they become due; that is, someone or something must be actively trying to collect -- is that not the way you read it? What this suggests is that, even though Hillier now owes Post a pile of money, if Post refrains from trying to collect right this minute, then Hillier technically is not insolvent. Let me present an analogy.

Let's say you make $2,000 per month but, for one reason or another, you owe the bank half a million -- one would assume you are in the perfect position to file for bankruptcy. But what if the bank is not trying to collect? What if the bank tells you that, sure, you fell on hard times, but they believe in you, and they're going to hold off going after you? Despite your debt to the bank, if the bank is cutting you that kind of slack, are you truly "insolvent?" If that crushing debt is, technically, not "coming due," do you really have the basis to apply for bankruptcy?

I'm not sure and I'm open to the musings of others with more background in this area, but that is why I suggested earlier that Ms. Post might want to hold off on trying to collect until she has dragged Hillier's worthless ass into an examination under oath to force disclosure of all of Hillier's assets. And once that's done, depending on those assets, Ms. Post might take the position that, if Hillier can't hand over the entire amount, Post would be amenable to some sort of long-term payment plan that Hillier could manage.

The point here is that, according to my reading of the BIA, if Post chooses wisely and only goes after Hillier for what she can afford, that might be enough to make Hillier totally ineligible for bankruptcy. However, I'm willing to be educated on this topic, so people who know more about this are invited to leave a comment. In the meantime, Patrick Ross still owes me close to $110K and, yes, there are further developments coming on that front, so stay tuned.

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