Debt collection in Canada
How to recover a commercial debt from a Canadian debtor
Canada is a stable market and one of great interest to foreign companies. However, commercial relations with local counterparties can involve insolvency risks, particularly in sales between small and medium-sized enterprises. Knowing the rules of debt collection and the procedures applicable in Canada, particularly in the province of Ontario, is essential to protect your interests.
Actions for international debt collection in Canada
Those wishing to initiate debt collection proceedings against a Canadian debtor can take a number of possible actions:
- Take legal action in Canada: it is possible to follow the simplified procedure (up to CAD 200,000), which reduces time and costs compared to the ordinary procedure, with more streamlined rules, or the ordinary procedure (over CAD 200,000) for higher value claims, with complete application of the Rules of Civil Procedure.
- Interim measures: tools such as asset freezing (Mareva injunction) to prevent the debtor from dispersing their assets.
- Recognition of a foreign title: it is possible to obtain recognition and enforcement of a foreign judgment if there is a real and substantial connection with the province, according to the criteria defined by case law.
Why rely on an experienced lawyer for debt collection in Canada
In Canada, and particularly in Ontario, it is not mandatory to send a letter of formal notice before taking legal action, but it is strongly recommended. A formal notice from a lawyer represents a last chance for amicable payment and, if unsuccessful, strengthens the creditor’s position in the subsequent legal phase.
Ursusnetwork offers specialized legal assistance in international debt collection in Canada, identifying the most appropriate strategy based on the value of the debt and the information available on the debtor, with the aim of reducing time and costs and acting effectively.