Payment Terms – Before you are sued by the creditor
This article deals only with Ontario Small Claims court matters.
There are several occasions where you may want to arrange payment terms with a creditor.
These times would be at various stages of a debt owing:
- before you are sued by the creditor (this article)
- after you are sued but before you have filed a defence
- after you are sued and after you have filed a defence
- after judgment has been obtained against you
For the purpose of this article, I will deal with:
Before you are sued by the creditor
I have found in my twenty-five years of paralegal practice that it is common for people to wait until they are sued to deal with a debt that they know is owing whether it is a liquidated or a non-liquidated debt.
By not dealing with it before a law suit has been launched, it becomes more expensive and often more difficult, complicated, and expensive to deal with. (See my article on Preparing and Filing Defences.)
The best time to get a professional involved is at the outset before a Plaintiff’s Claim is served on you. Oftentimes the creditor doesn’t want to go through the time, trouble and expense of suing you and so may be agreeable to a structured settlement, especially if the claim is less than perfect, as many claims are. An experience paralegal may be able to negotiate a settlement whereby you would pay less than the amount owing. The settlement would be put in writing and signed by all parties in order to protect both the debtor and creditor.
The benefit of acting early – before you are sued – is that it may be considerably less expensive to resolve the matter before a law suit is commenced by the creditor.
Settling a matter requires skill and experience which should always include written Terms of Settlement in order to protect you from a creditor coming back after you again for more money. I recommend that you consult with an experience paralegal or lawyer before doing your own settlement.
Later articles will deal with:
- after you are sued but before you have filed a defence
- after you are sued and after you have filed a defence
- after judgment has been obtained against you