How to Remove a Real Estate Writ after a Bankruptcy or Consumer Proposal

In navigating the complex world of financial obligations, one might encounter the term ‘writ’ in relation to their property. This term often crops up in situations involving bankruptcy or consumer proposal. So, what does it mean, and more importantly, how can you remove a real estate writ following a bankruptcy or consumer proposal? This comprehensive guide will answer these questions and more.

Unraveling the Concept of a Writ

A writ, in the context of financial obligations, is a formal legal document issued by a court granting authority to enforce a judgment or decree. The court usually issues these to law enforcement officers, such as sheriffs, but they may also be directed at the subject of the decree or judgment.

The Purpose of a Writ

The fundamental purpose behind a writ is to enforce payment from debtors to their creditors, as ordered by the court. Unfortunately, if a debtor is unable or refuses to make the required payment, the creditor gains the legal right to request that the enforcement office seizes the debtor’s personal possessions.

These assets are then sold at a public auction, and the proceeds are used to recoup the owed amount. However, once a creditor registers a writ with the Sheriff’s office, they are entitled to payment before the proceeds from the sale or refinancing of the debtor’s properties can be distributed.

Understanding the Role of a Real Estate Writ in the Debt Relief Process

In the debt relief process, which includes filing for bankruptcy or a consumer proposal, the debtor can eliminate their unsecured debts. However, things can get complicated if a creditor has a registered writ against the debtor’s property. It’s essential to recognize that a writ is not automatically nullified by declaring bankruptcy or filing a consumer proposal.

Writ vs Lien: A Comparison

Although they may seem similar, a lien and a writ are not the same. A lien refers to a claim registered against a property (often a home) and is more challenging to deal with than a writ.

Unlike a writ, a lien cannot be removed until it is fully repaid by the debtor, or the property is sold and the proceeds used to settle the lien. The most common body to register a lien on a debtor’s property to recover owed taxes is the Canada Revenue Agency (CRA).

How to Remove a Real Estate Writ after a Bankruptcy or Consumer Proposal

It’s possible to remove a writ from your property after being discharged from bankruptcy or upon completion of your consumer proposal. You have two options for doing this: you can either hire a lawyer to file a request to remove the writ or do it yourself.

DIY Writ Removal

If you choose to handle the removal process yourself, you’ll need to download, fill out, and file a specific form with the sheriff’s office. This process can be time-consuming, often taking more than 30 days to complete, but it can save you the expense of hiring a lawyer.

Removing a Lien

Unlike a writ, a lien cannot be removed by simply completing a bankruptcy process. You must either repay it in full or sell the property and use the sale proceeds to pay off the lien.

In the case of a consumer proposal, you can negotiate with the CRA to compromise the value of the lien, but approval is not guaranteed.

The Cost Implications

While removing a writ yourself is cost-free, you might have to wait longer for the removal to be finalized. On the other hand, hiring a lawyer can be quicker but may set you back upwards of $700.

What Happens to a Writ or Lien During Bankruptcy?

Once you file for bankruptcy, all legal actions against you are halted. No new legal action can be initiated against you during the bankruptcy period.

How Does a Consumer Proposal Affect a Writ or Lien?

The same principle applies to those undergoing a consumer proposal. All legal proceedings are stayed from the date of filing, and no new actions can be brought by creditors. This means no collections calls, no wage garnishment, and no new writs can be filed.

Deciding Between Consumer Proposal and Bankruptcy to Remove a Writ

Choosing between bankruptcy and a consumer proposal is a significant decision that can impact your financial future. Bankruptcy should be considered as a last resort, as it can lead to the seizure of your assets and a plummet in your credit rating.

A consumer proposal, on the other hand, might be a better option if you can manage to make payments on some, but not all, of your debts. This course of action allows you to retain your assets and has a slightly lesser impact on your credit rating.

Conclusion

Navigating the financial landscape can be daunting, especially when dealing with legalities such as writs and liens. However, understanding these concepts and knowing how to deal with them.

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