Understanding Writs: A Comprehensive Guide
When we talk about legal orders or commands, the term “writ” frequently comes up. But What is a Writ? This article aims to shed light on this term, its types, and its implications, particularly in the realm of financial debt.
1. Defining a Writ
A writ, in the broadest sense, is a formal written order issued by a court or legal authority. It instructs an entity or individual to act or refrain from a particular action. When it comes to financial debt, a writ is issued by a court after a creditor secures a judgment against a debtor.
2. Types of Writs
There are two main types of writs, each with distinct implications:
- Writ of Garnishment.
- Writ of Execution.
Let’s delve into these types to understand them better.
2.1 Writ of Garnishment
A writ of garnishment is a court order authorizing the seizure of property, wages, or income. It’s typically served to your employer, and a defined percentage of your wages is garnished as per the court order. This seized amount is then transferred to the creditor, which could be a financial institution or credit collection agency.
2.2 Writ of Execution
The other type of writ, known as the writ of execution, permits the seizure and selling of your property to satisfy the debt specified in the court judgment. Various property types, ranging from computers to cars, can be seized under this writ.
3. Impact of a Writ
The issuance of a writ can have considerable repercussions on your financial situation. However, the court tries to ensure that you have enough money to sustain yourself after the garnishment or seizure of your property. But for those in severe financial distress, any loss of income or property can lead to significant difficulties.
4. Exceptions to Seizures
In regions like Ontario, certain properties and assets are exempt from seizure. These include:
- One motor vehicle worth up to $6,600.
- Household furnishings and appliances worth up to $13,150.
- Tools of your trade up to $11,300.
- Certain kinds of life insurance.
- RRSP, RRIF, and SPSP savings, except for money contributed in the 12 months before a bankruptcy.
5. Principal Residence Rules
Under Ontario law, your principal residence is exempt from seizure if your equity in it is $10,000 or less. If your equity exceeds this amount, your home could theoretically be taken away, although this is not a common occurrence.
6. Dealing with a Writ
If a writ has been issued against you, it’s crucial to consult with a Licensed Insolvency Trustee. They can guide you on the potential options, which may include filing for bankruptcy or a consumer proposal.
7. Bankruptcy and Consumer Proposal
Filing for bankruptcy or a consumer proposal can provide immediate relief from most creditors and legal actions. However, exceptions exist, such as money owed for child support. Typically, writs of execution are ended when you are discharged from bankruptcy.
8. Professional Help
Institutions like Bankruptcy Canada offer professional help to individuals dealing with debt and budgeting crises. We can provide expert advice and solutions to help achieve financial freedom and peace of mind.
10. Conclusion
Understanding what a writ is and its implications is crucial when dealing with financial debts. If a writ has been issued against you, seek professional advice immediately to explore your options and safeguard your financial future.
