What to Do When a Debtor Won't Pay or Has No Money in Ontario

You have a judgment. The debtor is not paying. They may be ignoring your calls, claiming poverty, or simply nowhere to be found. This situation is frustrating, but it is not the end of the road. Ontario law gives judgment creditors meaningful tools to pressure non-paying debtors and uncover hidden assets — and patience combined with strategy often pays off.

This article walks through what to do when a debtor won't pay or claims to have no money, and how to assess whether a judgment is genuinely uncollectible or just temporarily out of reach.

First: Distinguish "Won't Pay" from "Can't Pay"

The practical response differs significantly depending on the real situation.

A debtor who won't pay typically has income, assets, or property but is simply ignoring the judgment. This person can be compelled — through garnishment, a writ, or enforcement proceedings. The challenge is tactical, not fundamental.

A debtor who genuinely can't pay right now may still have assets in the future. A judgment remains valid for years; a debtor who is broke today may be employed tomorrow, may inherit property, or may acquire assets. Keeping your enforcement infrastructure in place positions you to collect when circumstances change.

The key question is: what does the debtor actually have? If you do not know, find out before concluding the judgment is worthless.

Step 1: Conduct a Judgment Debtor Examination

If you are not sure what assets the debtor has, your first step should be a judgment debtor examination (also called an examination in aid of execution). This is a court proceeding where the debtor answers questions under oath about:

• Employment and income sources
• Bank accounts and investment accounts
• Real property (land, buildings)
• Vehicles and personal property
• Money others owe them
• Recent transfers of assets

Debtors who claim to have nothing must say so under oath. False answers constitute perjury. The examination creates a formal record of the debtor's financial position — and often reveals assets or income streams that were not previously visible.

Step 2: Investigate Independently

Beyond the formal examination, you may be able to locate information through:

• Land registry searches — real property ownership in Ontario is publicly registered; if the debtor owns land, it appears in the registry
• Personal Property Security Act (PPSA) searches — reveals whether the debtor's assets are pledged as collateral
• Corporate registry — if the debtor is a director or shareholder of a company, their business interests may be an asset
• Court records — other creditors may have already obtained information about the debtor

Step 3: Apply Multiple Enforcement Tools

Do not rely on a single method. Combine approaches:

• File a writ of seizure and sale in every county where the debtor may own property
• Serve a Notice of Garnishment on any known employer or bank
• Direct the Sheriff to seek out and seize personal property if the debtor has vehicles, equipment, or inventory

Even if these steps yield nothing immediately, the pressure they create can motivate voluntary payment or surface assets.

Step 4: Look for Hidden Assets

When debtors anticipate a judgment, some transfer assets to family members, related companies, or trusted associates to keep them out of reach. If this has happened, Ontario's Fraudulent Conveyances Act and Assignments and Preferences Act allow you to challenge those transfers.

Signs a fraudulent conveyance may have occurred:

• Property was transferred to a spouse, child, or parent shortly before or after the lawsuit began
• The transfer was for little or no consideration (a "gift" or a sale at well below market value)
• The debtor became insolvent soon after the transfer
• The transfer was not publicly disclosed or was structured to obscure it

If you suspect assets have been deliberately moved, get legal advice promptly. There are limitation periods on these claims as well, and early action matters.

Step 5: Consider Whether Bankruptcy Is Involved

If the debtor has filed for bankruptcy or made a consumer proposal, a stay of proceedings takes effect that halts your enforcement. At that point, you become an unsecured creditor in the insolvency proceeding.

However, some debts survive bankruptcy in Canada, including those arising from fraud, false pretenses, misrepresentation, or certain other conduct. If your judgment arose from such conduct, you may be able to prove the debt is non-dischargeable. This requires a specific court application and is worth discussing with a lawyer.

If the debtor is not bankrupt but you believe they are insolvent, you may also consider whether a bankruptcy application by a creditor (called a receiving order) is appropriate in larger cases.

Step 6: Be Patient but Active

For judgments against genuinely insolvent debtors, the strategy is often to maintain enforcement infrastructure — keep the writ registered, renew it before it expires — and monitor for changed circumstances. A debtor who:

• Gets a new job
• Receives an inheritance
• Sells property
• Wins a lawsuit themselves

...can suddenly become collectible. Post-judgment interest continues to accrue, so the judgment grows over time.

Set a reminder to review the debtor's situation every year. A quick land registry search or a new judgment debtor examination can reveal whether things have changed.

When to Write It Off

At some point, honest assessment may conclude that a judgment is not worth further investment. Factors that suggest this:

• Multiple examinations confirm no assets or income
• Debtor is bankrupt and the debt is dischargeable
• The cost of continued enforcement exceeds what you might recover
• The debtor has died with no estate

If you write off the debt for tax purposes (where applicable), consult a tax professional about the documentation you need. Writing off a debt internally does not extinguish your legal rights — you can still revive enforcement if circumstances change.

Frequently asked questions