Sued by a Collection Agency in Ontario: What to Do First

Getting served with a lawsuit from a collection agency is stressful, and the instinct to set the papers aside and deal with it "later" is understandable — and exactly the wrong move. Being sued by a collection agency in Ontario starts a clock, and what you do in the first days after service matters more than almost anything else in how the case unfolds.

This isn't a moment to panic, and it isn't a moment to ignore the problem either. It's a moment to move through a short, specific set of steps, in order, so you don't lose the case by default before you've even had a chance to respond to it on the merits.

Here is the practical order of operations.

Step 1 — Confirm You Were Properly Served

Before anything else, confirm the claim was actually delivered to you in a way that counts as valid service, and note the exact date. Your response deadline is calculated from that date, not from when you happened to open the envelope or notice the email.

Step 2 — Identify the Court and Read the Deadline

Ontario debt claims generally land in one of two places:

If you were served in Ontario, your deadline to respond is generally shorter than if you were served elsewhere in Canada or the United States, and shorter still than if you were served outside Canada and the U.S. entirely — calculate carefully based on where and how you were actually served, and don't assume the shortest timeline is safe to rely on if you were served differently.

Step 3 — Decide Whether You Actually Owe the Debt

Before responding, work through the substance:

• [ ] Do you recognize the original account this debt is based on?
• [ ] Does the amount claimed match your own records, including any payments already made?
• [ ] Has the debt possibly been resold or reassigned more than once?
• [ ] Could the debt be outside the limitation period?
• [ ] Is there any chance this is a case of mistaken identity or an already-settled account?

Your honest answers here shape whether you're heading toward a defence, a negotiated settlement, or simply confirming the amount and arranging to pay.

Step 4 — File a Defence Before the Deadline, Even a Basic One

If there is any real dispute about the debt, the amount, or your identity, file a defence within your deadline — do not wait until you have "figured everything out" first. If you do not respond in time, the collection agency can generally ask the court to note you in default and obtain a default judgment without a trial. A default judgment based on an unanswered claim is far harder to undo afterward than filing something on time would have been.

Step 5 — Consider Whether Settlement Makes Sense

Not every collections claim needs to go the distance. If the debt is genuinely owed and accurately calculated, negotiating a resolution — sometimes for a reduced lump sum, sometimes on a payment schedule — can be far cheaper and faster than litigating it out, even if you have some technical defences available.

Step 6 — Know What Happens If You Do Nothing

Doing nothing does not make a properly filed claim go away. It generally leads to a default judgment, which the collection agency can then enforce through tools like garnishment of wages or bank accounts, or a writ of seizure and sale against property — all of which are more disruptive and harder to reverse than responding on time would have been.

Frequently asked questions