Dealing with Debt

When you’re ready to tackle your debt, we’ll help you maximize your efforts.

  1. Home
  2. Dealing With Debt
  3. Help, I’m Being Sued! What To Do When You Get a Notice of Claim for a Debt

Help, I’m Being Sued! What To Do When You Receive a Notice of Claim for a Debt

By Clare Smith

You know you’re being sued for a debt when you receive a Notice of Claim. A Notice of Claim, sometimes called a Demand Letter, Claim or Statement of Claim, usually arrives via a knock on your door, or by registered mail where you have to sign to receive the paperwork. When you open the envelope, you will likely see an embossed seal on it, either from a Provincial Small Claims Court or the Provincial Superior or Supreme Court. It will have your name listed as well as the bank, creditor, or collection agency suing you.

A Notice of Claim comes because a person hasn’t paid their debt according to the original terms of their agreement with the creditor. It’s understandable that most people feel anxious and overwhelmed when being sued by a creditor because they don’t know what to do next.

If you’ve received a Notice of Claim, these should be your next steps:

1. Reply to the Notice of Claim

This is the single-most important thing you can do – reply to the notice of claim! Whatever your financial situation, however you arrived at this point, the one thing you shouldn’t do is ignore the claim. Where possible, you should seek legal advice, either on your own or by contacting a Legal Aid organization in your province.

If you don’t respond within the allotted time frame (usually 14 to 21 days) in the appropriate way, the claimant (company or person who sued you) can get what is called a default judgment. A default judgment can lead to garnishment of your income or a lien against your property without further notice to you.

Usually the documents you received should also include the documents you need to file a response, as well as a guide to completing those forms. If you cannot find those documents, contact the court directly and ask how to file a response. Please make sure you’re contacting the correct court!

A man reads a notice of claim letter

2. Prepare for a Court Date

Once you’ve responded to the claim, a court date will be set up. The court aims to act as a mediator between you and your creditor, and make a ruling on payment arrangements. The purpose of the court date is to set up a payment structure to repay the creditor, if it appears you can afford to do so. If you truly cannot afford to repay the debt, the Judge may also rule against the creditor, which means you may not have to pay the debt back.

The Judge’s ruling will be final at that time, or until you win an appeal.

3. Consider Payment Options

After you have replied to the notice of claim, and before the court date occurs, it is very important to consider what options you have to deal with the debt.

Most people can’t afford to risk getting their paycheques garnished, as usually 30% of their gross income is taken until the debt is paid in full. It’s better to act fast and speak with a professional about your payment options.

If you have been sued by a credit card company or debt collector and have the ability to pay the creditor in full, contact the creditor and make those arrangements as soon as you can.

If you are unable to pay them in full, you will need to explore what options you do have. Time is of the essence, so it’s best to make an appointment with a non-profit credit counsellor to get an unbiased review of all of your options at this point.

What to Do If You Have Received a Notice of Claim and Are Being Sued

If you’ve received a Notice of Claim and are being sued for a debt, contact the Credit Counselling Society as soon as possible. There’s a chance we may be able to help you avoid going to court. Your Credit Counsellor will review the big picture of where things are at with your finances, and help you find a solution that will work.

Being sued by a creditor doesn’t have to be financially devastating as long as you take the right steps. There are ways to prevent or stop income from being garnished, but it is vital to act quickly. The sooner you call, the more options you will have!

Worried about debt?
Get help to overcome it.

The sooner you start dealing with your debt, the sooner you see an improvement in your credit report If you need some help getting started with a plan, or if you’re not sure if your budget is realistic, contact a non-profit credit counsellor for free, confidential help. Typically, the earlier you contact us, the more options you’ll have.

Related Articles

Why Talk to Creditors?

When you’re in debt, your creditors can help you. But communicating with them effectively is key.

Debt Management Program

You’re not alone if you’re wondering if a DMP is right for you. Here’s what it is and how it works.

Credit Counselling

Are you curious about what credit counselling is or how it works? Here’s what you need to know.


Was this page helpful?

Helpfulness of page - face 1
Helpfulness of page - face 2
Helpfulness of page - face 3
Helpfulness of page - face 4
Helpfulness of page - face 5


  1. David Ho

    Hi ,

    My ex company check and told me that I own them 4 days of unpaid leave amount to $400 that I did not update on my time sheet so will my ex company sue me for $400 ?

    • David Ho

      Hi Sorry I mean if I don’t return them the $400 will my ex company sue me ?

      • CCS

        Hi David, When a company takes legal action against someone, it has to hire a lawyer. Lawyers are expensive, and hiring a lawyer to take someone to court costs many thousands of dollars. So the likelihood of them spending thousands of dollars in order to get you to pay only $400 wouldn’t make sense. It’s unlikely that a company would do this. If you aren’t able to afford the $400 right now, maybe you could contact the company and make some sort of arrangement to pay them. Maybe you could arrange to pay them $100 per month for 4 months, or maybe you expect to get enough money back after filing your taxes that you could pay them then. When money is owed, good communication often helps a whole lot.

  2. LInTon brown

    Getting sued for 17g.
    Lost my job due to Covid. Will they keep charging interest up to the court date?

    • CCS

      We’re sorry to hear about you losing your job plus getting sued. Taking someone to court is expensive and is usually the last thing most creditors want to do. That’s why most are usually quite happy to come to some sort of arrangement outside of court. The key thing is to communicate with them and find a way to work things out. If you don’t have a job, then that definitely makes it more difficult to work out an alternative payment arrangement. We’d strongly suggest that you contact a non-profit credit counselling organization near you. They can take a look at your situation and provide you with the best suggestions for how to move forward with this.

      In regard to your question about charging interest, a creditor will charge interest every day on money that is borrowed until the debt is paid off or until an alternative arrangement is made.

5 Based On 2

Submit a Comment

Your email address will not be published. Required fields are marked *