3. Reply Even If You Know You Owe the Money
This is the step that matters most when you’re being sued. If you don’t respond, the creditor can ask the court for a default judgment, which is a judgment against you without a trial and without further notice to you. In some provinces you’re noted in default first for missing the deadline. In British Columbia, when the claim is for a debt, a default order can be made without a hearing at all.
Replying isn’t the same as picking a fight, and it isn’t a promise to pay in full. Reply forms generally give you room to agree with all or part of the claim and to set out what you can realistically afford. If the creditor accepts your proposed payment, they may simply close or withdraw the legal action before a court date is ever set.
Not being able to afford payments on a debt isn’t a defence on its own. If the court decides the money is owed, a judgment will follow. By responding with enough details, you can make sure the court hears how much you’re able to pay. This puts you in a far better position than silence.
4. Check the Claim for Errors Before You Promise Anything
Read the claim closely before you sign, pay, or agree to anything. Is the amount right, including interest and fees? Do you recognize the creditor, or is it a company that bought the debt? Is the debt yours at all?
Then look at how old it is. Every province sets a limitation period, the window a creditor has to bring a lawsuit. Once that window closes, the debt is statute barred, which means the creditor has lost the right to enforce repayment through the courts, though you may still owe the money and collectors can still ask you to pay. In much of Canada that window is two years, Quebec’s is three, and some provinces and territories allow longer. The rules in the province where the claim was filed are the ones that count.
Two things are worth knowing. Making even a small payment, or confirming the debt in writing, can restart that limitation period. And an expired limitation period only helps you if you raise it in your response, since the court likely won’t apply it on your behalf. Ignoring a claim you believe is too old can still end with the creditor getting a default judgment.
How to Deal with a Debt Collection Agency Call or Letter
5. Weigh Your Repayment Options Before the Court Date
Once a judgment is granted, a creditor can apply to garnish your wages. How much they can take depends on your province, and it comes off your net pay, not your gross. Ontario protects 80% of net wages, so a creditor can take up to 20%. British Columbia protects 70%, with a minimum amount you keep each month. Alberta uses a formula that exempts a set monthly amount plus half of what you earn above it. Whatever the wage garnishment formula where you live, a garnishment of your income, a frozen bank account, or a lien against your property, is worth avoiding.
Many creditors will accept a reasonable payment arrangement rather than see the legal process through because court is expensive and small claims court can be slow. If you can pay in full, contact the creditor or debt collector right away. If you can’t, one of our credit counsellors can explain other debt relief options and help you put a realistic offer together. A consumer proposal or filing for bankruptcy also triggers a stay of proceedings, which stops most collection action, including a garnishment already underway. Even if you think you might be insolvent and need a trustee, check in with one of our credit counsellors first, just to be safe, because you don’t know what you don’t know.
Communicating Effectively With Your Creditors and Debt Collectors
Free Help and Advice When You’re Being Sued Over a Debt
Getting a notice of claim for a debt in the mail unsettles any Canadian, but it isn’t the end of the story, and you have more say in what happens next than it may feel like right now. The sooner you deal with being sued, the more options stay open to you. If you’re facing a statement of claim and aren’t sure what you can afford to offer, book a free, confidential, and non-judgmental appointment with one of our credit counsellors. We’ll review your whole situation with you and help you work out a plan. Reach out anytime. We’re happy to help.
This article is general information, not legal advice. For legal advice about your own situation, contact a lawyer or your provincial legal aid office.
Last Updated on October 22, 2026
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