Putting a lien on or seizing your assets – Debt collection at the CRA
When you have a debt you haven't paid, we may use your personal or business assets to secure or pay your debt.
Your personal or business assets can include, but aren't limited to, your:
- Personal residence
- Car
- Boat
- Artwork
- Cottage
- Rental property
- Business equipment
We may:
- Place a lien on your assets to secure your debt
- Seize and sell your assets to pay your debt
What it means when we secure a debt
When we secure a debt, it means we put a lien or charge against property owned by a taxpayer to protect the government’s interest until the debt is paid in full.
A lien is a legal claim that we put against a property to secure the payment of a debt. We can seize or force a sale of the property to pay the debt if the individual or business doesn’t make payments. In most cases, we will remove the lien when the debt is paid.
Before we can place a lien on or seize your assets, we must legally certify the amount you owe by getting a provincial judgement or a certificate from the Federal Court. This makes your debt a matter of public record.
We usually send you a letter to let you know that we have certified your debt in Federal Court. The letter tells you that if you don't fully pay your account, we may take further legal action to pay your debt. In some cases, such as when debts are at risk of not being collected (in jeopardy), we may tell you verbally that we have certified your debt in Federal Court.
Registering a lien on your assets
Once your debt is certified, we can register a lien against your assets and property. Registering a lien will secure the amount of debt you owe to us. This establishes our priority as a creditor when an asset is sold. It means your debt will be automatically paid with the funds from the sale, before you receive any proceeds.
Seizing and selling your assets
If your legally certified debt is still unpaid, we may get a writ or memorial. This would allow us to seize and sell your assets and property.
If we sell your assets, we will use the proceeds to pay:
- Your debt
- Any costs charged by the bailiff hired to sell the assets on our behalf
You will still have to pay any remaining debt.
What writs and memorials are
A writ is a written command or formal order in favour of the government. It's issued by the Federal Court and gives directions to a sheriff or bailiff to seize and sell the assets of an individual or a business. In some provinces, a writ is used to put a lien or charge against real property registered to a debtor.
A memorial is a document issued by the court. In some provinces, we ask for a memorial so we can put a charge or lien on property owned by a debtor.
Differences for Canada Border Services Agency (CBSA) customs debts
When you owe a customs debt, or when your customs accounts are not in good standing, we don’t need to legally certify the amount to take collections actions.
We may:
- Make a claim against your posted security
- Apply a lien that will prevent the release of goods you import
- Require you to pay the duties and taxes on imported goods at the time they are released
Other legal collection actions we may take
Depending on your situation, there are different legal actions we might take.
- Garnishing your income and accounts
- How we may make another person or entity also responsible for your debt
For more about how much time we have to collect debts, refer to: How long a debt can be collected by the CRA
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