What Happens If You Ignore a Demand Letter in Ontario?

A demand letter arrived, the deadline passed, and you did nothing — either by choice or because you weren't sure what else to do. Ignoring a demand letter in Ontario doesn't make the underlying dispute disappear. It simply hands the next move to the person who sent it, and the steps that can follow have a fairly predictable order.

Here's what actually happens, step by step, when a demand letter goes unanswered.

Step 1: The Deadline in the Letter Passes

Demand letters typically give a deadline to pay, respond, or otherwise resolve the matter. That deadline is set by whoever sent the letter, not by any law — but once it passes without a response, they're free to move forward with whatever the letter said would happen next, most commonly starting a court action.

Step 2: The Creditor Decides What's Next

Not every ignored demand letter turns into a lawsuit. Depending on the amount, the strength of the claim, and the sender's own priorities, they might send a follow-up letter, try another way to reach you, or decide the amount isn't worth pursuing further. But for a genuine, well-documented debt of any significant size, moving toward court is a common next step.

Step 3: You Get Served With a Court Claim

If the creditor proceeds, the claim will typically be started in Small Claims Court, under Simplified Procedure, or in the ordinary Superior Court of Justice process — the right track depends largely on the amount claimed. You'll be formally served with the claim document: a Plaintiff's Claim in Small Claims Court, or a Statement of Claim (or Notice of Action) in the other two.

Being served is a distinct legal event from receiving the earlier demand letter — it starts new, formal deadlines that matter a great deal.

Step 4: The Defence Clock Starts Running

Once served, you generally have a set window to respond formally: 20 days if you were served within Ontario, 40 days if served elsewhere in Canada or the United States, and 60 days if served outside Canada and the U.S. This is a real deadline, unlike the informal one in the original demand letter — missing it has direct legal consequences.

Step 5: No Defence Filed Means Default Judgment

If you don't file a defence in time, the other side can typically ask the court to note you in default and, in many cases, obtain a default judgment against you — a judgment issued without a trial or a hearing on the merits, simply because you didn't respond in time. At that point, the debt is no longer just an allegation; it's a court judgment.

Step 6: Enforcement Can Follow

A judgment — whether by default or after a full hearing — gives the other side legal tools to actually collect, including:

• Garnishment of wages or amounts owed to you by a bank or another party
• A writ of seizure and sale against your property or other assets
• Examination proceedings, requiring you to answer questions under oath about your income and assets

Ontario law does shield a portion of wages from garnishment for ordinary debts, so garnishment isn't unlimited — but it's still a real and enforceable tool once a judgment exists.

Is Ignoring It Ever the Right Call?

Occasionally. If a demand letter is clearly baseless, from an unfamiliar sender, or for an amount so small that a response costs more than the risk, some people reasonably choose not to engage. But that's a judgment call best made after actually reading the letter carefully — not a default strategy for anything uncomfortable.

If there's any real chance the claim is genuine or the amount is significant, silence is generally the riskiest option available, because it forfeits your chance to negotiate, dispute, or shape the outcome before it becomes a court matter.

Frequently asked questions