Some bad debt is a reality for any business. Sometimes we may forgive and forget, but debts for unpaid invoices do very frequently escalate to Toronto Small Claims Court litigation. In this post, we offer some questions and issues to consider if invoices for your work or products went not paid for and you would like to collect the funds owing to you as per your invoices, or if you were sued 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, which 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, but if the debtor writes to them saying s/he disputes the debt, the collections agency must stop its calls. Then, you must get a judgment in order to collect on your unpaid invoices, no matter how straight forward you think the case is.
Conversely, if you are in a situation where you did not pay for work or products with good reason and dispute the debt, upon appropriate notice prepared and served as prescribed by law, you can stop collection agency calls. 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 were not paid based on an invoice, then understandably, the invoice itself will be an important part of the small claims court case. The contract you had will also be important, whether that contract was written, based on a string of emails, or oral. Finally, you should usually be prepared to 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 related to unpaid invoices is that the quality of the work or products provided was poor. It is important to consider this aspect of the discussion 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 your received was poor. If this is the case, then you might have a good defence against the small claim for collection on unpaid invoices. If 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.
Limitation period in Toronto 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 just because your invoice is dated more than two years ago, you are not allowed to start a case in Toronto Small Claims Court. Other specific circumstances must be considered, such as when you came to believe that the defendant will not pay voluntarily.
Similarly, if you are being sued based on an invoice from two years ago or more, it is important to consider the specific circumstances of the matter to see if the limitation period may apply to your Ontario Small Claims Court matter. Please do not hesitate to contact us for a free case assessment.