Writs & Caveats in Debt Collection - Which to use & when.

You have found out that your debtor that you've been chasing owns property and you already have obtained Judgment against them.

What should you do next to enforce your debt? A Writ or a Caveat?

Writs

A writ can be a powerful and effective tool to use in enforcing your debt given the correct circumstances including;
- The debtor owns property
- There is a significant amount of equity in the property

If you have been able to ascertain the above information & have already obtained Judgment on the account, the next step is to issue a Writ. The only way you can instruct a sheriff to sell a property is after a writ has been lodged with with Land Titles. To enforce the sale of the property, the Writ must come back with a Non-Levy (ie the Sheriff was unable to seize any goods).

Where you have not received a notice of Non-Levy, your Writ is still lodged at Land Titles. This means that if the property is sold there is a chance the your loan will be paid out on settlement (however this is not guaranteed).

Our experiences in the use of Writs is that the debt is paid in full before the Sheriff sells the property (there have been a couple of exceptions). This is the most desirable outcome for all parties as it minimises the costs involved.

Caveats;

A Caveat can only be used for Debt Collection purposes where you are entitled to a legal or equitable estate or interest in land under the Real Property Act. The only way you will have a legal or equitable interest in the Real Property Act is if the borrower / mortgagor has agreed to give a security over the land. This is the only time you can lodge a caveat.

The fine for lodging a caveat not under these circumstances is very large.

Therefore you cannot use a Caveat to recover debts involving unsecured personal loans, unsecured credit cards, overdrawn savings accounts.

Note - Technically a caveat has nothing to do with Judgment as you could issue a Caveat under the loan contract.