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ARTICLE · 04 JULY 2023

Why Enforcement On Personal Guarantees Can Be So Challenging For Creditors

McMillan LLP
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Commercial lenders often require that the principal of the corporate borrower guarantee the loan. Even though the guarantee is often unsecured, the lender reasons that a valuable...

CanadaFamily and Matrimonial
Jeffrey Levine
Jeffrey Levine
Daniela Hartmann
Daniela Hartmann
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Commercial lenders often require that the principal of the corporate borrower guarantee the loan. Even though the guarantee is often unsecured, the lender reasons that a valuable personal residence will offer material recovery for the lender if the corporate borrower fails. Realizing on real estate is notoriously difficult, however, and a recent decision of the Ontario Superior Court of Justice has stymied creditors' efforts to fine-tune the process.

Historical Challenges to Recovering on Money Judgments Against Real Estate

After a creditor obtains a judgment on an unsecured personal guarantee, it is prudent to have the court issue a writ of seizure and sale against the judgment debtor. The writ is filed with the local sheriff. Ontario's Execution Act identifies the sheriff's sale process as the primary method for the enforcement of a writ of seizure and sale against a judgment debtor's real property. The precise details of this process are aptly described as a

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The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

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