Homeowners who file bankruptcy or a customer proposal can get their unsecured debts eliminated when they are discharged from bankruptcy or their proposal is completed. However, this process can get complicated if a creditor has a writ registered with the Sheriff’s office.
What Is a Writ?
Writs are official court documents granting authority to put in force the decree or judgement of the court. Writs are usually given to officers of the law, such as Sheriffs, but they can also be given directly to the subject of the decree or judgement.
Courts usually issue writs to order debtors to pay their creditors certain amounts of money.
If the court orders a debtor to pay their debt but they are unable or unwilling to make the payment, the creditor has the legal right to ask the enforcement office to seize some of the debtor’s personal possessions and sell them at public auction to recover what they’re owed.
When creditors register a writ with the Sheriff’s office, it means that they must be paid before the proceeds resulting from the sale of the debtor’s personal properties or from their refinancing can be distributed to their owner. A writ cannot be removed from the property unless the debt is paid.
Can a Consumer Proposal or Bankruptcy Affect a Writ?
Declaring bankruptcy or filing a consumer proposal can remove a writ from your personal property once you earn your discharge or certificate of completion.
You should tell your Licensed Insolvency Trustee about your intentions to sell or refinance your property so they can assist with any existing writs. Writs can complicate a sale or refinancing procedure even if they’re not enforceable because of a filed bankruptcy or consumer proposal.
Can You Remove a Writ For Free?
You can ask the Sheriff’s office to remove the writ on your property for free. In Ontario, the process involves filing a written request to your local Sheriff’s office. This process can take 30 days or longer to complete, so initiating this process right after your bankruptcy is discharged can shorten the amount of time you have to wait until the writs are removed from your property.
You should always make sure that the writs on your property have been removed before initiating a sale or refinancing process to avoid unnecessary paperwork, legal fees, and stress.
Lien On Real Estate
Even though they can often be perceived as being similar, a lien is not the same thing as a writ.
A lien is the legal right or interest a creditor has in a debtor in order to secure the repayment of their debt. Liens may appear voluntarily when a person applies for mortgage on real estate, car loans, or security interest in personal property. Liens can also be imposed by law, as it’s the case with statutory liens or tax liens.
In simple terms, the difference between writs and liens is that writs act as orders to pay and liens are debts secured against the debtor’s personal property. Similar to a mortgage, a lien has to be paid when a property is sold in order to be removed.
Liens can also be perfected or imperfected. Perfected liens are usually obtained by creditors to gain a priority interest in the encumbered property. When a creditor obtains a perfected lien, they become the main beneficiaries of the property’s value and also inform third-party creditors of the lien.
Additional Reading: How a Consumer Proposal Impacts Your Home or Mortgage
Remove A Writ Of Execution In Ontario
If you suspect that your personal property may have a writ or a lien registered against it, talk to one of our Licensed Insolvency Trustees to find out how you can remove it. Contact Remolino & Associates today for a FREE consultation. The first steps toward removing a writ from your property are only a click away.