Author: Hilary Chase, Licensed Paralegal
Where do you begin when someone owes you money?
In an ideal world, when someone owes you money they make their payments on time and in full. Unfortunately, this is not always the case. In some circumstances it can make sense to extend a grace period to a debtor. In others, it makes more sense to pursue the amount outstanding, simply because of the amount owing, or the amount of time it has been left unpaid.
Since you have the duty to make all reasonable attempts to collect the amount before going to court, it would be prudent for you to enter into negotiations with your debtor in the event that they respond. A common way to start the collections process is a demand letter.
A good demand letter will outline the amount owing, as well as any interest, if any, applies to that amount. It will clearly state a deadline by which the amount should be paid. The letter should also outline the consequences of lack of payment, which can be litigation. The possibility of going to court can encourage a debtor to take the amount owing more seriously.
In some cases, the cost of going to court could be prohibitive. That does not simply refer to the monetary costs of going to court, either. Your time is valuable. Sometimes it makes more sense to negotiate a payment plan, or a lower payment instead of spending your resources pursuing the amount through litigation. In circumstances where negotiations break down, or do not occur, it can make the most sense to go to court to pursue the debt.
Seeking out the support of a legal professional can help you determine what your most productive steps are in pursuing the outstanding amount. We’re happy to help you navigate these steps so that you are not handling your situation alone. If you are interested in collecting by way of a demand letter, negotiations or small claims give us a call at (647) 494-9599 or email us at info@law365.ca.
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