Collecting Unpaid Debts in BC: A Step-by-Step Guide

An unpaid invoice, a personal loan that was never repaid, a customer who keeps promising to pay next week: when someone owes you money in British Columbia, the law gives you a way to recover it. But there are deadlines, and choices early on that are hard to undo.

This guide walks through the usual steps in order, from the first demand letter to filing in the right forum, and explains why it helps to think about how you will collect before you sue.

Step 1: Send a clear demand letter

Before you file anything, put your demand in writing. A demand letter tells the debtor exactly what you are owed and what happens next. It is often the first step, and a well-organized letter also becomes useful evidence if the matter goes further. A demand letter usually sets out:

• The amount. The principal owing and how you calculated it, plus any interest your contract allows.
• The basis. What the debt is for, with dates and references to the invoice, contract or loan.
• A deadline. A firm, reasonable date for payment.
• The next step. What you intend to do if it is not paid, such as filing a claim.

Keep it factual and avoid threats: the letter may later be read by a tribunal member or judge. Send it in a way you can prove, and keep a copy.

Step 2: Check the limitation period

Under section 6 of the Limitation Act, you generally have two years from the day a claim is “discovered” to start a court proceeding. A claim is discovered when you knew, or reasonably ought to have known, that you suffered a loss, that the other person caused it, and that a court proceeding would be an appropriate way to remedy it. There is also an outer limit: under section 21, most claims cannot be brought more than 15 years after the act or omission they are based on.

Section 24 can change the count. A payment on the debt, or a written acknowledgment of it (an email can qualify), can restart the limitation periods. The rules on what counts are technical, so do not assume a partial payment or a friendly message has bought you more time. Working out exactly when the clock started is not always simple either, so do not leave it to the last month. Our guide to the two-year limitation period in BC explains how the clock works.

Step 3: Choose the right forum

Where you file depends mainly on how much you are claiming:

• Civil Resolution Tribunal (CRT): $5,000 or less. Small claims of $5,000 and under must usually go to the CRT, an online tribunal that handles disputes about loans, contracts, and goods and services. It does not decide some claims, such as defamation or the division of family property, and it can refuse to resolve a claim it considers too complex.
• Provincial Court (Small Claims): $5,001 to $35,000. A Small Claims judge cannot award more than $35,000 plus interest and expenses, so if you are owed more you can either abandon the excess to stay in Small Claims or go to the Supreme Court.
• Supreme Court: over $35,000. The process is more formal and usually takes longer and costs more, but it is the forum for larger debts.

In some situations, a claim of $5,000 or less can be heard in Provincial Court instead of the CRT. We compare the three options in more detail in CRT, Small Claims or Supreme Court? Where your dispute belongs in BC.

Step 4: Gather your documents before you file

Debt claims are usually won or lost on paper. Before you start, collect:

• The agreement. The contract, quote, purchase order or loan agreement. If there is nothing formal, gather the texts or emails that show what was agreed.
• The account. Invoices, statements and a running total showing what was billed and what was paid, including any partial payments.
• Proof of performance. Delivery records, sign-offs, photos or other evidence that you supplied the goods or did the work.
• Correspondence. Your demand letter, any reply and any promises to pay.
• Information about the debtor. The correct legal name and address and, if you can find out, where they work, bank or own property. That last point matters later.

Make sure you name the right party. If you dealt with a company, the company is generally the one that owes you, not its owner, unless someone signed a personal guarantee or there is another legal basis to claim against them personally.

Step 5: What happens if the debtor disputes the claim

Once the claim is served, the debtor has a short window to respond. At the CRT, a respondent generally has 14 days from service of the Dispute Notice (30 days if served outside BC); if they do not respond, you can ask for a default decision. In Provincial Court, a defendant served in BC has 14 days to file a Reply. In the Supreme Court, a defendant in Canada has 21 days to file a response to civil claim, and if none is filed the claimant may be able to seek default judgment.

If the debtor does dispute the debt, or files a counterclaim, the process moves to its next stage:

• CRT: online negotiation, then facilitation with a case manager, then a binding decision by a tribunal member if the dispute does not settle.
• Provincial Court: usually a settlement conference with a judge, and for claims from $10,000 to $35,000 either party can require the other to attend mediation. Unresolved claims go to trial.
• Supreme Court: a more formal process with document disclosure and other pre-trial steps before a trial, unless the claim settles first.

Winning is not the same as being paid

A judgment or order gives you the right to be paid; it does not put money in your account. The court does not collect the money for you. If the debtor still does not pay, you have to use enforcement tools such as a payment hearing, garnishing wages or bank accounts, registering the judgment against land, or having court bailiffs seize and sell property.

That is why it helps to ask, before you file, whether the debtor has income, a bank account or property in BC. In some debt claims, the Court Order Enforcement Act even allows a garnishing order before judgment, but the requirements are strict. Thinking about collection at the start can shape which forum you choose and how hard you push for an early settlement.

Owed money? Get a plan before you file

Our litigation lawyers can review your documents, check the limitation period, prepare a demand letter, and advise you on the right forum and on how a judgment could realistically be collected.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.