How to Cancel a Notice of Levy After Debt Payment (Philippine Legal Perspective)
(Updated as of 12 June 2025—Philippine statutes and jurisprudence cited remain in force on this date.)
1. What a “Notice of Levy” Really Is
| Type of Levy | Typical Issuing Authority | Governing Legal Source | Common Scenarios |
|---|---|---|---|
| Judicial Levy on Execution | Sheriff / Court | Rules of Court, Rule 39 (Execution, Satisfaction & Effect of Judgments) | Unpaid civil judgment (e.g., loan, damages claim) |
| Tax Levy (National Taxes) | Bureau of Internal Revenue (BIR) | National Internal Revenue Code (NIRC), §§205–207 | Income tax, VAT, excise, estate tax deficiency |
| Tax Levy (Local RPT) | City/Municipal Treasurer | Local Government Code (LGC) of 1991, Book II, Title II, Chapter IV | Unpaid real-property tax |
| SSS/PhilHealth/Government Financial Institution Levy | Concerned agency | Specific charters & rules | Unpaid contributions or guaranteed debts |
A levy is a statutory lien. Cancellation therefore requires: (1) proof of full payment and (2) a formal act of release by the very office that issued it.
2. Universal Documentary Requirements
- Official receipt (OR) or valid proof of payment covering the debt, judgment, or tax.
- Certificate of Full/Final Payment (often prepared by the creditor but issued or at least acknowledged by the levying authority).
- Satisfaction of Judgment (for judicial levies) or Certificate of Tax Clearance/Lifting (for tax levies).
- Affidavit of the debtor–owner requesting cancellation and stating there is no other outstanding lien.
- Owner’s Duplicate Certificate of Title (OCT/TCT) or Chattel Registration Certificate bearing the levy annotation.
- Two government-issued IDs and updated tax declarations/real-property tax clearances where relevant.
Keep multiple originals; the Register of Deeds (ROD) or Land Transportation Office (for chattels) keeps at least one.
3. Step-by-Step Guide per Levy Type
A. Judicial Levy on Real Property (Rule 39)
| Step | What to Do | Legal Basis |
|---|---|---|
| 1 | Pay the judgment debt, costs, interest, and sheriff’s fees. | Rule 39 §9 |
| 2 | File a Motion for Acknowledgment of Satisfaction of Judgment in the executing court. | Rule 39 §6 |
| 3 | Obtain a Sheriff’s Return and Certificate of Satisfaction; have the judge approve it. | Rule 39 §6–7 |
| 4 | Prepare a Petition/Request to Cancel Notice of Levy addressed to the Registrar of Deeds, attaching the court order, certificate, and duplicate title. | Property Registration Decree (PD 1529), §108 |
| 5 | Register the court order at the ROD; pay registration and annotation fees. | PD 1529 §§57, 108 |
| 6 | ROD annotates a Cancellation Entry on both the original title (in its vault) and the owner’s duplicate. | PD 1529 §62 |
| 7 | Secure a Certified True Copy (CTC) of the clean title to evidence the lien-free status. | PD 1529 §74 |
Timeline: If the motion is unopposed, courts usually grant it within 15 – 30 days. ROD processing takes ∼ 3–5 working days in most registries.
B. BIR Notice of Levy
Pay the assessed deficiency or secure approval of a compromise settlement (NIRC §204).
Submit a Verified Request for Lifting of Levy to the Collection Division of the Revenue Region where the warrant was issued.
BIR issues a Certification/Lifting Order signed by the Regional Director (or Deputy Commissioner, depending on amount).
Present the lifting order to:
- the Registry of Deeds (for real property)—same PD 1529 process as above; or
- the Bureau of Customs / Bank (for seized personalty) for release.
Update close-monitoring in the BIR system (eFPS) to avoid future “re-flagging”.
C. Local Government RPT Levy
- Pay the real-property tax plus surcharge/interest (LGC §255).
- City/Municipal Treasurer issues Cancellation of Levy and Release of Lien (often on LGU letterhead citing LGC §258).
- Register cancellation with ROD; obtain a clean title.
- Request an updated Tax Declaration from the Assessor’s Office showing “No encumbrance”.
D. Levy on Personal Property (Chattel Mortgage context)
Pay the secured loan → Mortgagee executes a Release of Chattel Mortgage → Register with the Land Transportation Office (motor vehicles) or Register of Deeds (other chattels) within 30 days under the Chattel Mortgage Law (Act 1508).
4. Forms & Templates (Core Clauses)
Sample Petition to Cancel Levy (Judicial)
“WHEREFORE, it is respectfully prayed that the Register of Deeds of _________ be ordered to cancel the Notice of Levy annotated as Entry No. _______ on TCT/OCT No. ______ pursuant to Rule 39, Section 16 and the full satisfaction of judgment evidenced by the attached Certificate.”
Similar wording works for BIR/LGU but replace statutory references.
5. Frequently Asked Questions
| Question | Short Answer |
|---|---|
| Can I refuse registration fees? | No. PD 1529 requires fees for every annotation and cancellation. |
| What if the sheriff fails to sign? | File a motion asking the court to direct another officer or the clerk to sign in his stead (Rule 39 §6). |
| Is publication needed? | Only if there was a prior auction; cancellation itself is a registration act, not a notice requirement. |
| How long does a levy remain if unpaid? | Judicial levies are valid until satisfied or superseded by sale; tax levies follow statutory periods (BIR: 3 years to auction; LGU: 1 year to sell, then 1 year redemption). |
| Does payment to a collection agent suffice? | Yes, if the agent is duly authorized; always secure an OR or authority letter. |
| Can a levy be cancelled provisionally? | Courts may suspend enforcement upon posting a supersedeas bond (Rule 39 §12). |
6. Common Pitfalls & How to Avoid Them
- Paying but forgetting to lift the levy – Lenders/collectors rarely do it for you; always initiate the request.
- Mismatch in names or title details – Make sure the cancellation instrument mirrors the levy annotation word-for-word.
- Lapsed redemption periods – Full payment after judicial or tax sale may no longer resurrect title; you’ll need to attack the sale itself.
- Partial settlements – Only a full discharge qualifies for cancellation; negotiate for a compromise order if only partially paid.
- Unreleased interests (e.g., spouse’s share) – Both spouses’ signatures may be needed under the Family Code for conjugal properties.
7. Jurisprudential Nuggets
- Development Bank of the Phils. v. PRS Realty (G.R. 163080, 27 March 2013) – Levy creates a perfected lien that must be expressly discharged; mere payment is insufficient without cancellation.
- Republic v. Court of Appeals, 397 Phil. 35 (2000) – Redemption or payment after tax delinquency sale compels the BIR/LGU to issue a release instrument.
- BDO v. Sheriff Reyes (A.M. P-22-018-SC, 10 May 2022) – Sheriffs may be administratively liable for refusing to issue a certificate of satisfaction once payment is made.
8. Practical Checklist (One-Page)
- Secure proof of payment (OR/manager’s check copy).
- Get official release document (Certificate/Lifting Order).
- Draft and sign affidavit/petition for cancellation.
- Prepare original and duplicate titles + valid IDs.
- File at proper registry; pay fees.
- Obtain certified true copy of clean title.
- Notify credit bureau / update credit files (optional but wise).
Staple this checklist to your documents folder; many registries reject incomplete packets.
9. Final Takeaways
Payment alone does not erase the lien; registration is king in Philippine property law. Always follow through with the issuing authority, then with the Registry of Deeds (or equivalent registry) to wipe the slate clean.
Disclaimer: This article is for educational purposes and does not constitute legal advice. For complex cases—e.g., contested payments, multiple levies, insolvency proceedings—consult a Philippine lawyer specializing in taxation or property law.