When someone owes you money and refuses to pay, it can be incredibly frustrating. Ontario law provides several mechanisms for creditors to recover debts, ranging from demand letters to court judgments and enforcement.
The short answer
Effective debt recovery starts with a formal demand letter from a lawyer. If that fails, you can file a lawsuit in Small Claims Court (for debts under $35,000) or the Superior Court of Justice. Once you obtain a judgment, you can enforce it through garnishment or seizing assets.
The Demand Letter
Often, a formal demand letter on law firm letterhead is enough to prompt payment. It outlines the debt, the legal basis for the claim, and a strict deadline for payment before litigation commences.
Obtaining a Judgment
If the debtor ignores the demand, the next step is civil litigation. If the debtor fails to respond to your claim, you can obtain a default judgment quickly. Depending on the nature of the debt, such as unpaid rent, you might pursue recovery through the Landlord and Tenant Board for residential and commercial tenancies.
Enforcing the Judgment
A judgment is just a piece of paper until it is enforced. Common enforcement methods in Ontario include:
- Garnishment: Seizing money from the debtor's bank account or wages.
- Writ of Seizure and Sale: Registering the judgment against the debtor's real estate or personal property.
- Examination in Aid of Execution: Forcing the debtor to answer questions under oath about their assets.
Note that if the debt is related to criminal fraud or theft, parallel criminal charges may be involved, though civil recovery remains a separate process.
When to talk to a lawyer
Chasing debts takes time away from your life or business. Kuner Law helps clients in Mississauga pursue efficient, cost-effective debt recovery strategies. Book a consultation to discuss your outstanding accounts.
Frequently asked questions
Q: How long do I have to collect a debt in Ontario?
A: You generally have two years from the date the debt was last acknowledged or a payment was last made to commence legal action under the Limitations Act.
Q: Can I recover my legal fees?
A: If you are successful in court, the judge may order the debtor to pay a portion of your legal costs, though it rarely covers the full amount.
About the Author
Jora Kuner
Jora Kuner is the founder of Kuner Law and a lawyer called to the bar of the Law Society of Ontario. He holds a Juris Doctor from Bond University, an NCA Certificate, a BA (Hons.) from York University, and a Certificate in Dispute Resolution. He practises civil litigation, criminal defence, and tenancies in Mississauga and across Ontario.
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