I was reading on the internet about the Canada Revenue Agency (“CRA”) and the registration of liens on real estate and how the CRA secures your debt with them. The author was saying that they could register a Writ of Fieri Facias, or a Writ of Fi Fa, against real estate to secure the claim. This is not true. A Writ of Fi Fa is no longer valid when someone files an assignment in bankruptcy or a consumer proposal.
However, there are three ways that the CRA can secure your liability to them. The first, and only one you would be aware of when it happens, is if you voluntarily pledge security to the crown. The second way, and the one the other writer was probably referring to, is if the CRA were to register a certificate on title to your real estate. They do this with a document general and it can be done without you knowing. This certificate supercedes any writ filed and only stands behind any existing registered mortgages and unpaid property taxes. They are secured to the lesser of the amount of your debt or the amount of the equity in the real estate. Finally, the CRA can register the same certificate under the Personal Property Security Act. Their registration places them ahead of any other registrations on any assets that you own. So if you have pledged a car for security, while a Writ of Fi Fa would not place CRA ahead of the lender, the certificate would give the CRA first priority. The certificate also has a life of twenty years before it has to be renewed.
So what does it mean? If CRA has registered a certificate against you, I would strongly suggest that you meet with us to see if a consumer proposal or a bankruptcy might be the solution to your problem. While you would still have to make arrangements with CRA to repay the secured portion of their debt, the interest clock would stop running. And if they are threatening to register against you but have not, don’t delay, by filing a consumer proposal or a bankruptcy CRA will be prevented from taking legal action including obtaining a certificate.
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