Debt collection in Quebec: what the law says

Unpaid bills, unpaid loans, overdue rent or a long-running customer account: debt collection affects businesses and individuals alike. In Quebec, the process is governed by the Civil Code of Quebec and the Act respecting the collection of certain debts. To consult the official texts, see the legislation on LégisQuébec and Éducaloi’s popularized resources.

Before running to court, a structured approach maximizes your chances of recovering the amounts owed, often without a trial. Here’s how to do it, step by step.

The steps to effective collection

A well-conducted collection case follows a logical progression: the debt is documented, the debtor is sent a reminder, formal formal notice is given, and then the appropriate recourse is chosen if nothing changes.

The formal notice is the pivot of the process: poorly drafted, it can delay or weaken the appeal. Consult our complete guide to formal notice in Quebec to find out what it requires.

Which court to claim your claim?

The competent court depends on the amount claimed. Claims of $15,000 or less fall under the jurisdiction of the Small Claims Division, where the parties represent themselves – our article on small claims in Montreal explains when to consult anyway. Between $15,000 and $85,000, it’s the Court of Quebec; beyond that, the Superior Court.

Beware of the statute of limitations

The right to claim a debt is generally prescribed after three years (article 2925 of the Civil Code of Québec). After this period, the appeal is inadmissible, even if the debt is real. Certain actions of the debtor, such as an acknowledgement of debt or a partial payment, may interrupt the statute of limitations. Our article on extinctive prescription in Quebec details these rules.

Practical tips for companies

The best recovery is the one that is prevented. Clear contracts with interest and a collection charge clause, rigorous invoicing, quick reminders and credit checks for new customers significantly reduce overdue accounts. When a case escalates, our civil and commercial litigation lawyers assess the debtor’s creditworthiness before incurring costs: a judgment against an insolvent debtor has little practical value.

Frequently asked questions about debt collection

How much does a lawyer cost to collect a debt?

Fees vary depending on the complexity and contestation of the case. For a documented and uncontested claim, a formal notice and negotiation are often sufficient, at a limited cost. An initial assessment compares the amount at stake with the foreseeable costs.

The debtor ignores my formal notice: what should I do?

After the deadline has expired, you can file a legal claim with the competent court. The debtor’s silence does not prevent the judgment: if he does not defend himself, a default judgment can be obtained.

Can I claim interest and my fees?

Yes. Interest accrues at the rate agreed in the contract or, failing that, at the legal rate, generally from the date of the formal notice. A contractual clause may also provide for reasonable collection costs.

What is the deadline for pursuing an unpaid invoice?

Three years from the due date of the invoice, subject to an interruption of the limitation period. Beyond that, the recourse is generally lost: it is not necessary to delay in acting.

Have your collection case evaluated

Each debt deserves an appropriate strategy: reminder, formal notice, negotiation or procedure. Abg & cj Company supports businesses and individuals in Montreal and throughout Quebec. Contact us for an initial consultation.