Have you ever heard stories of people who owe money but just ignore it? For creditors looking to recover their money, one of the legal methods available is through a Prohibitory Order and Sale of Property.
How Does This Process Work?
What is a Prohibitory Order?
Imagine the debtor owns a house or land in their name. If they quickly sell that property before settling their debt, the creditor loses out, right?
A Prohibitory Order is a court application to prevent the debtor from selling or transferring ownership of their property. Once the court grants the order, it will be registered on the property’s land title. This alerts others that the property is now under the court’s supervision.
What Happens After Getting the Order?
Once the property is successfully frozen from being sold, the creditor can apply to the court to sell the property via public auction.
Usually, this auction is open to the public—anyone can bid. The proceeds from the sale will be used to pay off the debt.
The process typically takes between 5 to 10 months, depending on:
- The value and condition of the property
- Whether the property is already charged to a bank or has other debts
- The current market demand (whether it’s easy to sell at the time)
Are There Any Risks?
Yes. If the property’s value is low, or if it’s already mortgaged to a bank, the creditor might not recover the full debt. But at least there’s still a chance to recover part of it.
Why Is This Important for Us to Know?
If you’re a borrower be careful. Your property can be sold if you fail to pay your debt and a court judgment is issued against you.
If you’re a creditor or a business owner, this is one of the legal options available to protect your rights when someone doesn’t pay what they owe.