Some bad debt is a reality for any business. Sometimes we may forgive and forget. Yet, debts for unpaid invoices do very frequently escalate to Toronto Small Claims Court litigation. This post offers some questions and issues to consider if invoices for your work or products remain unpaid.  This post may be helpful if you want to collect the funds owing to you as per your invoices. It may also help if someone sues you for not paying an invoice.

Using a collection agency

• It is commonly believed that matters about unpaid invoices can simply be forwarded to a collections agency. The agency will pursue the debtor and oblige him or her to pay.
• This is true but in part. A collections agency can certainly attempt to get your money back. However, if the debtor writes to them that s/he disputes the debt, the collections agency must stop its calls.
• Then, you must get a judgment to collect on your unpaid invoices. It does not matter how straightforward you think the case is.
• Conversely, you may be in a situation where you did not pay for work or products with a good reason to dispute the debt. Then,  you can stop collection agency calls upon appropriate notice prepared and served as prescribed by law.

Please do not hesitate to contact us if you are looking to have such a notice prepared.

Building your small claims court claim for unpaid invoices

• If you did not receive payment for your invoice, then understandably, the invoice will be an important part of the small claims court case.
• The contract you had with the debtor will also be important, whether it was a string of emails or oral agreement.
• Finally, you should usually prepare and provide documents, witness testimony or other evidence that would attest to the quality of goods and services you charged for.
• Frequently, the crux of the defence in small claims matters about unpaid invoices is that the quality of the work or products provided was poor. It is important to consider this aspect as you sue in Toronto Small Claims Court.

Building your small claims defence for unpaid invoices

Oftentimes, you have a good reason for not paying an invoice. Usually, this reason is that the quality of the goods or services you received was poor. If this is the case, then you might have a good defence against the small claim for collection on unpaid invoices. In case you are in such a situation, please do not hesitate to contact us for a free case assessment.

If you do not dispute that you owe money based on the invoices, your defence can take the form of negotiating an acceptable payment plan.

The limitation period in the Small Claims Court

• Generally, the limitation period on Ontario Small Claims Court matters is two years.
• This means that you cannot sue another person or company for something that happened more than two years ago.
• However, this does not always mean that you cannot start a case in Small Claims Court just because your invoice dates more than two years back. Other specific circumstances may come into play.  For example, it matters when you came to believe that the defendant will not pay voluntarily.

Similarly, if someone sues you for an invoice from two years ago or more, it is important to consider the specific circumstances of the matter.  The court needs to determine if the limitation period applies to your Ontario Small Claims Court matter.

Please do not hesitate to contact us for a free case assessment.