Collecting Unpaid Rent or Loans Through Small Claims Court

The situation can become very stressful when a tenant fails to make rent payments or someone never repays a loan. If you are in Ontario, Small Claims Court presents a quick and cost-effective means of recovering money up to $35,000, without the necessity of hiring a lawyer.

Whether you are a landlord, private lender, or an individual collecting a debt, understanding the process will improve your chances of obtaining a successful result and enforcing your judgment. 

The process will be described as clearly as possible so that you know the steps required to receive your money.

What debts can you collect in Small Claims Court?

According to the Ontario Ministry of the Attorney General, Small Claims Court is for “somewhat simple disputes regarding money or property with a value of less than $35,000.”

• Debts you can recover include:
• Unpaid rent (after the tenant has vacated) 
• Personal loans 
• Unpaid invoices
• Repayment agreement
• Repairs to property

This is why it is the best option for enforcement when dealing with landlords, lenders, and people managing private loans.

Collect Unpaid Rent Ontario

When a tenant owes rent and leaves without paying, the Landlord and Tenant Board (LTB) no longer has jurisdiction over the matter. In these situations, the Ministry confirms landlords can pursue a debt in Small Claims Court. 

Step 1: Collect good evidence

Evidence is everything when it comes to increasing your chances of winning. Gather:

• The lease
• Payment history
• Any early N4/N5 notices issued
• Move-out pictures
• Text messages confirming the debt
• Documentation is critical for the court.

Step 2: Add up the total amount owed 

You can collect:

• Overdue rent
• Utility payments (if included in the lease)
• Damage claims related to the tenant
• Court costs
• Interest (pursuant to the Courts of Justice Act)

Step 3: Send a demand letter 

A formal written demand demonstrates you tried to resolve without engaging a court. This can carry weight with the courts.

Step 4: Make a claim Form 7A 

Claims can be actioned online via Ontario’s Civil Claims Portal. The form lays out an explanation of:

• What is owed
• Why is it owed
• Evidence in support of the claim.

Case study: Collecting $6,200 after a tenant left on short notice without paying rent

A Brampton landlord submitted a filing after a tenant moved out without paying $6,200 in rent. He provided:

• A signed lease
• Monthly rent ledger
• Photo evidence of damages
• Text messages from the tenant promising “catch up next month”

Court Results: 

The judge awarded the full amount plus $325 in court fees. This was very helpful in this case, as the landlord provided clear evidence of the debt, plus two-way communication that was documented. 

Competitive differentiation: 

Most guides provide steps, but do not share real-life Ontario examples. Sharing actual cases and results like this offers your readers concrete clarity and real-life experience, unlike generic advice from the internet! 

Recovering Unpaid Personal Loans

Small Claims Court can also address unpaid loans for personal use that are written agreements or verbal agreements. It is stated in Ontario’s Small Claims Court Rules, “…a contract (oral or written) is enforceable if there is sufficient evidence to support the existence of the contract.”

What Evidence Helps You Win?

• Loan agreement (written)
• E-transfer with a note saying “loan”
• Withdrawals from your bank record
• A conversation or text message about the loan by the debtor or a statement about repayment
• If the borrower (debtor) acknowledges the loan in writing, even if it is just a single message, this is strong evidence. 

What Happens After You File Your Claim?

1. Serve the Defendant

The claim must be served in accordance with the court’s rules. Proper service is essential, and if it is done improperly, it can delay the proceedings or weaken your case. 

2. Defendant’s Acknowledgment or Default Judgment

If the defendant does not respond within 20 days, you can file for a judgment by default. This is usually the quickest and easiest way to win when you have a solid case. 

3. Settlement Conference

In addition to asking questions and reviewing documents, the judge helps the parties settle.  The majority of claims have been settled at this point.

4. Trial (If Needed)

A judge considers your evidence and makes a decision that is binding upon the parties. 

Judgment Enforcement

It is not just enough to win the case. You may need to use an enforcing tool to get paid. 

1. Garnishment from Wages

The court may get to garnish (deduct) up to 20% from the debtor’s wages.  

2. Garnishment from a Bank Account

The debtor’s bank account can be frozen, and their funds paid to you. 

3. Property Impoundment 

Sheriffs are allowed to impound and sell non-exempt property under the authority of court orders.

Paralegal Small Claims Debt Collections

Licensed paralegals will assist you with the following tasks: 

• preparing a claim
• gathering evidence 
• filing online or in person 
• preparing affidavits
• serving documents 
• representing at settlement conferences
• enforcing a judgment (garnishments, seizures) 

Many landlords and lenders prefer professional assistance because missteps can result in continued occupancy delays or weaken your claim. 

Conclusion

Collecting unpaid rent in Ontario becomes much easier when an individual understands the process in Small Claims Court, collects strong evidence, and follows the appropriate method and rules set forth by the Ministry of the Attorney General. 

With the correct representations and direction from a legal representative, the chances of winning and collecting restitution are enhanced. 

Owing money? Let us help you commence and win your case – contact us today.

FAQs

1) How can I collect unpaid rent Ontario? 

Unpaid rent can be collected in Ontario by commencing a claim in Small Claims Court, with the assistance of a licensed paralegal.

2) What does a paralegal small claims debt do? 

A paralegal will help you prepare a Small Claims Court claim that is legally compliant, filed promptly, and focused on the return or repayment of your money.

3) How long does it take to recover money from Small Claims Court? 

Typically, the process can take a few months, with variations for different small claims case complexities, courtroom schedules, and other parties involved.

4) Can I collect personal loans or rent from friends or tenants in Ontario? 

Yes, unpaid personal loans or rent can be collected by commencing a claim in Small Claims Court, with the assistance of a paralegal.

5) Do I need to hire a lawyer to file a claim in Ontario? 

No, a licensed paralegal can file claims up to $35,000, including the collection of unpaid rent or loans.