In London, Ontario, you can sue for unpaid business debts up to $35,000 CAD in Small Claims Court. The process begins with a formal demand letter, followed by filing a Plaintiff’s Claim (Form 7A) at the London Courthouse, which carries a basic court filing fee of $108 CAD.
Operating a business in London, Ontario, comes with its share of challenges, but few things are more frustrating than clients who simply refuse to pay their invoices. Whether you run a marketing agency in the downtown core near Richmond Row or a construction firm in the south end, unpaid debts restrict your cash flow and hinder your ability to grow. Fortunately, the legal system in Ontario provides clear mechanisms to help you collect what you are owed. 💼
Many business owners hesitate to pursue legal action because they fear the process will be too complicated or expensive. However, for debts under $35,000, the Ontario Small Claims Court is specifically designed to be accessible to the public. You do not necessarily need a large corporate law firm to recover your funds. By following a structured approach, you can navigate the local court system at 80 Dundas Street and successfully enforce payment.
Step-by-Step Process to Recover a Business Debt in London
Recovering a debt is not a single, overnight event. It requires a systematic escalation, giving the debtor a chance to pay voluntarily before heavily involving the court. Here is the general pathway most local businesses take. 📋
Step 1: Sending a Formal Demand Letter
Before filing a lawsuit, you should always send a formal demand letter. This document clearly states the exact amount owed, references the original contract or invoice, and gives the debtor a strict final deadline to pay (usually 10 to 15 days). Sending this letter via registered mail shows the debtor you are serious. Often, the mere threat of a lawsuit is enough to secure payment without ever stepping foot inside the London Courthouse.
Step 2: Filing a Plaintiff’s Claim (Form 7A)
If the deadline passes and the debt remains unpaid, your next step is to file a Plaintiff’s Claim. You must complete Form 7A, detailing the history of the debt and attaching your evidence (such as contracts, bounced cheques, or email threads). You then file this document either online through the Ontario government portal or in person at the Small Claims Court counter in London. 🖊️
Step 3: Serving the Defendant
Once the court issues your claim, you are legally required to “serve” it on the debtor (now called the Defendant). You cannot just leave it in their mailbox. Personal service is generally required, meaning you or a hired process server must physically hand the documents to the business owner or director. You must then swear an Affidavit of Service to prove to the court that the Defendant received the lawsuit.
Step 4: The Settlement Conference and Trial
After being served, the Defendant has 20 days to file a Defence. If they do, the court will schedule a mandatory Settlement Conference. This is a private meeting with a deputy judge in London to discuss a possible compromise. If you cannot reach an agreement, the case will proceed to a formal trial, where you will present your witnesses and evidence before a judge for a final decision. 🤝
Step 5: Enforcing the Judgment
Winning at trial results in a Judgment, but the court does not collect the money for you. If the Defendant still refuses to pay, you must take enforcement steps. In Ontario, this often involves applying for a Notice of Garnishment to seize funds directly from their corporate bank account or their receivables. Alternatively, you can request a Writ of Seizure and Sale, allowing local enforcement officers to seize their business assets.
How Much Does it Cost in London?
The Small Claims Court is designed to be affordable, but you should still budget for administrative and professional fees. As of April 2026, here are the expected costs in Middlesex County:
| Filing a Plaintiff’s Claim | $108 (Frequent filer rates may vary) |
| Hiring a Process Server in London | $75 – $150 per attempt |
| Setting a Date for Trial | $308 court fee |
| Paralegal or Lawyer Fees | $1,500 – $4,000+ (Depending on trial length) |
| Filing a Notice of Garnishment | $144 court fee |
If you are successful at trial, the judge will typically order the Defendant to reimburse you for a portion of these legal and court costs. 💸
How Long Does the Process Take?
Patience is required when navigating civil litigation. Filing the claim takes only a few days, but you must give the Defendant 20 days to respond. Scheduling a Settlement Conference at the London Courthouse generally takes 3 to 5 months due to local backlogs. If the matter goes all the way to a full trial, the entire process from demand letter to final judgment can easily take 9 to 18 months.
Frequently Asked Questions (FAQ)
What happens if the Defendant ignores the lawsuit?
If the Defendant does not file a Defence within 20 days, you can file for “Default Judgment.” This means you automatically win your case, and you can immediately proceed to the enforcement and collection stages without needing a trial.
Can I sue for more than $35,000 in Small Claims Court?
No. The absolute maximum you can claim in the Ontario Small Claims Court is $35,000 CAD. If you are owed $40,000, you must either waive the extra $5,000 to stay in Small Claims or file a much more expensive lawsuit in the Superior Court of Justice.
Do I have to hire a lawyer for Small Claims Court?
You are not legally required to hire a lawyer. You can represent yourself or hire a licensed paralegal, which is often a much more cost-effective option for businesses dealing with routine unpaid invoices.
Is there a time limit to sue for an unpaid debt in Ontario?
Yes. Under the Limitations Act, you generally have exactly two years from the date the invoice became overdue (or the date they last acknowledged the debt) to file your Plaintiff’s Claim. If you wait longer, your claim will be legally barred.
Can I add interest to the unpaid invoice amount?
Yes. You can charge the interest rate outlined in your original business contract. If your contract does not specify an interest rate, you can ask the court to award “pre-judgment interest” according to the standard rates set by the Courts of Justice Act.
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