Understanding the Writ of Execution
A writ of execution is a critical legal instrument that is instrumental in the enforcement of a judgement of possession. It’s a document that emanates from a judicial body, like a court, with the authority to enforce a judgement. This article aims to demystify the concept, application and implications of a writ of execution.
What Essentially is a Writ of Execution?
A writ of execution is a legally binding document that a court issues and serves. It either commands a person to comply with a particular action or it restricts them from engaging in some activities. The writ is primarily utilized in Canada to enforce payment and often encompasses asset seizure.
On the issuance of a writ of execution, a court official or a Licensed Insolvency Trustee assumes responsibility of taking possession of the property or assets that owe to the creditor.
If the asset involved is money, the debtor’s bank account may be frozen, or the funds might be transferred into a holding account. When property or assets are to be exchanged, they can either be transferred in kind or sold by the court official or Licensed Insolvency Trustee. Proceeds from the sale of these assets will then be applied towards satisfying the creditor as per the court judgment terms.
When is a Writ of Execution Utilized?
A writ of execution is primarily granted when an individual is legally obligated to make a payment to a creditor and isn’t willing to do so voluntarily. It is also commonly employed during eviction of a tenant who has defaulted in rent payment and refuses to vacate the property.
Furthermore, a writ of execution facilitates collection and sale of property, with the proceeds being used towards settling the debt. In certain circumstances, the debtor’s bank account can be accessed, though certain funds like Social Security income are protected.
During bankruptcy proceedings, a writ of execution may be issued as these processes need to go through the court. A Licensed Insolvency Trustee is generally involved in executing the writs of execution, helping enforce the judgment of payment as required.
Which Assets are Shielded from a Writ of Execution?
There exist specific assets that are exempt from being seized under a writ of execution, but these may vary from province to province. These include unemployment payments, social security payments, and retirement account assets. Other exempt assets range from clothing and home furnishings to pets.
Can Bankruptcy or a Consumer Proposal Impact a Writ of Execution?
Bankruptcy or a consumer proposal filing by Canadians can result in complete elimination of their unsecured debts or reduction by up to 80% once they are discharged or complete their consumer proposal.
However, the debt relief process becomes more intricate if a writ of execution is in play. Both bankruptcy and a consumer proposal can remove a writ from your property once discharged or completed, but it is advisable to inform your Licensed Insolvency Trustee if you plan to sell or refinance your property so they can assist.
How is a Writ of Execution Removed?
The removal of a writ from your property can be requested for free by applying to the Sheriff’s office. In Ontario, this simply involves filing a formal request with your local Sheriff’s office. This isn’t the quickest of processes, often taking around a month or more to complete.
It is advised to commence this process as soon as your bankruptcy is discharged to reduce the waiting time until the writs are removed. Any writs on your property must be removed before you attempt to sell it or have it refinanced. This helps avoid extra administration, time, and stress, letting you enjoy life after a consumer proposal, or life after bankruptcy.
Is a Lien the Same as a Writ of Execution?
Contrary to popular opinion, a lien is not the same as a writ of execution in Canada. Though a lien on property might seem similar, they are distinct. A lien is the legal right that a creditor possesses to claim repayment from the borrower when a debt is overdue.
Liens can also be voluntary when it comes to applying for a mortgage or a car loan. The CRA also imposes tax liens, which are in place legally. Simply put, a writ is an order to pay, while a lien is a debt secured against an asset or property. Much like a mortgage, a lien needs to be paid when a property is sold for it to be removed.
If you suspect that you may have a writ of execution, or even a lien on your property, it’s recommended to book a free consultation with an experienced Licensed Insolvency Trustee at Bankruptcy Canada. With over thirty years’ experience of helping to remove them, we have been aiding Canadians on their journey to debt relief. The initiation of removing a writ of execution is just a phone call away. Reach out today – you owe it to yourself.
