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Can Creditors Take My Calgary Personal Injury Settlement?

The province of Alberta has taken steps to protect personal injury victims from creditors.

While your personal injury settlement isn’t 100% safe, Alberta law gives you breathing room that doesn’t exist in other places, such as the United States.


Creditors May Not Create Liens

In Alberta, creditors may not create a lien against a personal injury settlement.

Often they don’t have to—your medical bills are part of the evidence we draw upon to build your personal injury case. Your lawyer knows precisely how much you owe, and clients and lawyers usually want those providers paid right away.

Nevertheless, health providers may not force the issue. They can bill your health insurance company or you but can’t go after your settlement directly.

Do plan on paying these bills. Do not plan a “take the money and run” strategy. If you don’t pay these providers, eventually, they will have the power to make your life miserable.

Besides, your personal injury attorney may well be able to negotiate with hospitals and doctors on your behalf. With our help, we might reduce the amount you owe, allowing you to keep a significant portion of your personal injury settlement.


The Alberta Limitations Act

The Alberta Limitations Act prohibits creditors from enforcing debts against a personal injury settlement until two years after the settlement date. They can send you a bill to inform you of the debt, but they can’t send you to a collection agency, file a lawsuit, or place a lien on your property until that limitation period has passed.

Once the limitation period has passed, they can do all those things, and you don’t want to give them a chance.


Exceptions to the Alberta Limitations Act

A few government agencies will have the power to enforce debts against you at any time. Both the Workers’ Compensation Board and the Canada Revenue Agency can garnish a personal injury settlement to pay a debt you owe to them.

It would be a good idea to work with your lawyer to account for any such debts before matters progress to the point where garnishment becomes an issue.


Get Help Today

The laws which cover personal injury settlements and creditor protection can be highly complex. The specific facts of your case could impact both your obligations and the remedies creditors have available to them.

If you’re concerned about creditors attempting to collect debts from your personal injury settlement, contact Merchant Law. Our team can help you understand your options and provide advice on how to protect yourself.

We have over thirty years of experience helping plaintiffs just like you. Contact our team to schedule your first case review today. The sooner you involve a lawyer, the better your results will likely be.

About Donald I.M. Outerbridge

Donald became the Executive Director of Merchant Law Group LLP starting in 1993, nearly 30 years ago. His experience managing law firms at various levels and in multiple provinces across Canada goes back even further to 1981.

Please note: The information provided on this website is Not Legal Advice. The information may or may not be accurate. The information is for discussion purposes only. Reliance upon any information provided would not be grounds to advance a claim against Merchant Law for providing any advice. In order to get a formal legal opinion upon which you may rely about any specific fact scenario, you would have to first retain the services of a lawyer and request a formal legal opinion.