If I am sued in Ontario small claims court, will it show up on my credit report?
If you are sued in Ontario Small Claims Court, the first thing that will happen is that you will be served with a Plaintiff’s Claim. Once you receive notification of the plaintiffs’ claim, you will have the opportunity to present a defense.
If you do not file a defense, the other party could get a default judgment against you. If you present a defense, the matter will proceed to a pretrial conciliation hearing and, if no settlement is reached, it will proceed to trial.
The only time anything will report to your credit report is if the other party is successful in obtaining a judgment against you. This can only be achieved in three ways:
1. You do not present a defense and the court gives the other party a default judgment.
2. You enter into a court-approved settlement and do not follow the terms.
3. At trial, the judge agrees that the other party is right and awards them judgment.
You have more to worry about than your credit report if someone gets a judgment against you.
Once the other party has obtained a judgment, you can file a writ of execution with the sheriff’s office. Whenever a mortgage is closed in Ontario, the attorney will, as a condition, foreclose and seek foreclosure on the applicant’s behalf. Foreclosures filed must be paid off before the consumer can close on their mortgage.
If the other party uses your judgment to obtain a notice of garnishment, you can send the garnishment to your employer and then your employer must remit 20% of your net earnings to the Ontario Small Claims Court for payment to the other party .
They can also use the judgment to freeze your bank account, which involves notifying your bank that you have a pending judgment against you.
The Ontario Small Claims Court offers a comprehensive process to help parties reach fair settlements when they are involved in a dispute.
If you have just been sued, even if you think you owe the money, you may want to consider filing a defense. By filing a defense, you can dispute the full amount claimed or admit that you owe part or all of the amount claimed and propose a payment plan. Then, when you go to the pretrial settlement conference, you will have the opportunity to propose a payment plan to the other party in front of a judge or arbitrator.
If you can reach an agreement, the judge or arbitrator will bind the agreement and no judgment will be entered against you as long as you abide by the terms of the agreement. If you breach the terms of the agreement, the other party will be eligible to seek a default judgment and you will have no choice.
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