Personal loans and repayment disputes in Ontario

Lending money to a friend or relative can produce a civil dispute when repayment expectations were never recorded clearly. Preserve the transfer confirmation, messages about the loan, agreed repayment dates, and any payments received. Evidence distinguishing a loan from a gift can be central.

Write an accurate account of what was agreed without adding terms after the relationship deteriorates. Consider whether interest was actually agreed and legally recoverable. A demand should identify the balance and the basis for repayment. Limitation issues can depend on the loan terms and when payment became due, so avoid assuming every transfer has the same deadline. Settlement may preserve value where court proceedings would consume much of the amount at stake.

Prepare a chronological account of the advance and the repayment discussions. Include the purpose of the transfer, the words used when the money was requested, and any later statement acknowledging that it was a loan. If money was advanced in several instalments, record each separately. A repayment spreadsheet should distinguish principal from any interest being claimed. Do not rewrite an old message, alter an electronic transfer description, or present a new summary as if it were the original loan agreement.

The response may raise issues beyond nonpayment. The recipient may say the money was a gift, repayment depended on a later event, or some funds were already returned in cash. Identify how those assertions can be checked and whether another witness has direct knowledge. A carefully worded settlement can sometimes address the balance without continuing a personal conflict. If instalments are proposed, document their dates and the treatment of missed payments. The goal is a clear, supportable repayment position that reflects the actual agreement and evidence.

Sources

• Ontario guide to making a Small Claims Court claim
• Limitations Act 2002 particularly sections 4 5 and 13

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General Ontario legal information, not legal advice for your matter, and reading it does not create a retainer. Sources checked 15 October 2026: check the current law, forms and dates before you act.

Photos from Pexels: Paying with a contactless card at a terminal · Using a calculator beside an invoice.

This article is general information for people in Ontario, not legal advice. Rules, forms and deadlines change, and every situation is different. Check the current rule or speak to a licensed legal professional before you act.