Guides · reviewed 2026-09-04

How to sue a friend or a family member for a loan

Legal information, not legal advice. Results depend on the facts of your case.

Legal information, not legal advice. This guide and our free tools give legal information. They do not give advice about your case. A licensed lawyer can give legal advice.

The answer

A personal loan is a real debt, even between friends. You can sue for it in Small Claims Court, up to $50,000. Most of these cases turn on one question: was the money a loan or a gift?

What to do

  1. Collect the records: e-transfers, bank statements, texts, and emails about repayment.
  2. Write a timeline: each advance, each repayment, and the balance.
  3. Make a written demand for repayment, with one date. For a loan with no due date, the clock starts on the first day the borrower fails to pay after your demand.
  4. Check the deadline: /calculators/deadlines.
  5. Send a formal demand letter: /demand-letter.
  6. Fill in Form 7A, file it, and pay $108: /build/7a.
  7. Think about collection. A job means wages, and you can garnish up to 20% of net wages.

Loan or gift: the proof

Texts help most: any message where the person promises to pay the money back. A witness to the agreement helps. Part payments help: they show the person treated the money as a loan. A signed written acknowledgment of the debt restarts the clock, if made before the deadline. A part payment has the same effect as a written acknowledgment.

If the borrower is under 18

A person under 18 can be sued, but a litigation guardian must defend, and the court must approve any settlement. Get advice before you file.

Deadlines and fees

  • Loan with a due date: the clock starts at the missed date, in most cases.
  • Loan payable on demand: the clock starts on the first failure to pay after the demand.
  • File a claim: $108. Default judgment request: $94.

Common mistakes

  • Do not call the money a gift in one message and a loan in the next. The texts are evidence.
  • Do not demand payment and then wait for years. The clock runs after the demand.
  • Do not skip the demand letter. It costs $0, and it can end the dispute.
  • Before you sue a person with no income and no assets, read: is it worth it.

When to get a lawyer

Get legal advice if the person says the money was a gift, or the amount is large. Legal services provided by Mithril Law — Jonathan Kleiman, licensed Ontario lawyer.

Free tools