When someone in Ontario owes you money and won't pay, the law provides a structured process for enforcing your rights. The key is to move through the steps methodically — first attempting to resolve the matter without litigation, then pursuing legal proceedings if necessary, and finally enforcing any judgment you obtain. This guide covers the full spectrum of Ontario debt collection tools available in 2026.
Step 1: Demand Letter — Start the Clock on the Limitations Act
Before filing any court claim, send a formal demand letter to the debtor. The demand letter should set out the amount owed, the basis of the debt, and a clear deadline to pay (typically 10–15 business days). Keep a copy of the letter and evidence of delivery (registered mail, email with read receipt, or courier).
The demand letter is important for the Limitations Act clock: under Ontario's Limitations Act, 2002, a creditor has 2 years from the date the debt was "discovered" to file a court claim. A demand letter itself does not extend the limitation period — but if the debtor acknowledges the debt in writing in response to the letter (e.g., "I know I owe this, I'll pay next month"), that acknowledgment may restart the 2-year clock under s.13 of the Act. If you are approaching the 2-year mark, file the court claim immediately — do not wait for the demand letter response.
Step 2: Small Claims Court — Up to $35,000
Ontario's Small Claims Court is designed to be accessible without a lawyer for claims up to $35,000 (not including interest and costs). The process is simpler and faster than Superior Court proceedings. Steps include:
- File a Plaintiff's Claim (Form 7A) at the Small Claims Court location for the defendant's jurisdiction (or where the cause of action arose). Pay the filing fee (currently $102 for online filing for claims over $1,000).
- Serve the defendant with the claim using an approved method of service. The defendant has 20 days to file a Defence (Form 9A). Keep your proof of service.
- If no defence is filed: After 20 days, you can request a default judgment — an automatic judgment in your favour without a trial.
- If a defence is filed: The court will schedule a settlement conference (mandatory in Ontario Small Claims) and then a trial if the matter does not settle.
- Judgment: If you succeed at trial, the court issues a judgment for the amount owed plus pre-judgment interest (at the post-judgment interest rate in effect when the cause of action arose) and costs.
Step 3: Superior Court for Larger Claims
For claims over $35,000, the Ontario Superior Court of Justice is the appropriate forum. Superior Court proceedings are more formal, typically involve discovery (exchange of documents and examinations), and can take 12–36 months or more to reach trial. Legal representation is strongly recommended. Consider whether the amount owed justifies the cost of Superior Court litigation — for amounts between $35,000 and $75,000, a costs-benefit analysis is warranted.
Step 4: Default Judgment
If you file a court claim and the defendant does not respond within the required time (20 days in Small Claims Court), you are entitled to request a default judgment. In Small Claims Court, file a Request to Clerk (Form 9B) requesting that the registrar sign the default judgment. The registrar can sign the judgment without a hearing if your claim is for a specific amount of money and you have filed the required affidavit evidence. A default judgment has the same legal force as a judgment obtained after a trial.
Enforcing a Judgment: Wage Garnishment
Obtaining a judgment is only half the battle — you must still collect on it. The most effective enforcement tool in Ontario for individual debtors is wage garnishment. Under Ontario's Wages Act, RSO 1990, c W.1:
- Ontario courts can order that a portion of the debtor's wages be paid directly to the creditor by the debtor's employer.
- The garnishment is limited to 20% of the debtor's net wages (wages after statutory deductions), leaving the debtor 80% of their earnings.
- To garnish wages, file a Notice of Garnishment (Form 20E in Small Claims) with the court, along with a copy of the judgment and an affidavit of default. The court will then issue the garnishment notice to the employer.
- The employer must remit the garnished wages to the court on each pay date, and the court forwards the funds to you.
Garnishing Bank Accounts
In addition to wages, Ontario judgment creditors can garnish bank accounts. A garnishment against a bank account attaches to the balance in the account at the time the bank receives the garnishment notice — there is no 80% limit for bank accounts (unlike wages). If the account has $5,000 and your judgment is for $4,000, the bank will hold $4,000 pending resolution. If the debtor's account is empty, the garnishment is fruitless. Multiple garnishments may be required to catch funds as the debtor deposits them.
Writ of Seizure and Sale
An Ontario judgment can be registered as a writ of seizure and sale against the debtor's real property and personal property. Filing a writ with the sheriff's office (Court Enforcement Office) in the county where the debtor owns land:
- Creates a lien against the debtor's real property — the property cannot be sold or refinanced without satisfying the writ.
- Can also be used to seize and sell the debtor's chattels (personal property with value), though this is less commonly pursued for small amounts due to cost.
A writ of seizure and sale is particularly effective against debtors who own real estate — the writ appears on a title search and must be paid out before any sale or refinancing can close. This "passive" enforcement approach often results in payment when the debtor eventually sells their home.
PPSA Registration for Secured Creditors
If you are a secured creditor — meaning you lent money and took a security interest in the debtor's personal property (equipment, inventory, accounts receivable) — you should have registered your security interest under Ontario's Personal Property Security Act, RSO 1990, c P.10 (PPSA) at the time of the loan. A PPSA registration gives you priority over unsecured creditors and over subsequently-registered secured creditors in the event of the debtor's insolvency or default.
If you failed to register your security interest and the debtor is insolvent, you may lose your priority and be treated as an unsecured creditor. This is why PPSA registration at the start of any secured lending transaction — no matter how informal — is critical.
Ontario Collection Agency Rules
If you use a collection agency to collect the debt on your behalf, the agency must be registered under Ontario's Collection and Debt Settlement Services Act. Key rules for collection agencies include:
- Must not contact debtors before 7 a.m. or after 9 p.m. on weekdays, or before 1 p.m. on Sundays.
- Must identify themselves, the creditor they represent, and the amount of the debt on every call.
- Cannot use threatening, profane, or harassing language.
- Cannot contact the debtor at their workplace if the employer has prohibited workplace contact.
- Must stop contacting the debtor if the debtor requests in writing that all contact cease (subject to formal legal process rights).