What is a Terms of Payment hearing in Small Claims Court in Ontario?

A Terms of Payment hearing is a step in Small Claims Court where the court determines how a judgment will be paid if the defendant cannot pay it all at once. It most commonly arises in two situations: when a defendant files a Defence admitting the claim but claiming they cannot pay the full amount immediately, or after a plaintiff requests payment terms following a default judgment.

At the hearing, the court looks at the debtor's income, expenses, and assets to set a realistic payment schedule. The debtor must bring evidence of their financial circumstances. The court can order the judgment paid in installments over a period of time rather than in a lump sum.

If the debtor fails to comply with a Terms of Payment order — by missing payments or paying less than ordered — the creditor can resume enforcement steps such as garnishment or asset seizure. The Terms of Payment order does not forgive the debt; it only sets the schedule for paying it. If the debtor's financial situation improves, the creditor can ask the court to revisit the schedule.