Debt is the simplest, most basic form of commercial claims. At its heart, a person claims debt against someone who owes them money. In the best case, the person who is owed money can measure the sum of money owed to the creditor precisely. If the creditor can measure the money owed precisely, then it opens up the likelihood that the creditor can seek other remedies like pre-judgment garnishment.
Every debt action has the following basic form:
1. The reason for the debt.
Every debtor owes the creditor money for a reason. Here are some examples of the reason for the debt:
The creditor lent money to the debtor. In exchange, the debtor agreed to repay the money with interest, by some frequency, and on certain dates.
The creditor and the debtor entered into a contract under which the creditor supplied certain goods or services on a specific date and required the debtor to pay for those goods or services.
2. The reason why the debt is owed.
The debtor missed an interest payment, or a principal payment, or both.
The debtor refused to pay for the goods or services in full despite the creditor's demand.
3. Any credits owed to the debtor.
The debtor may have paid part of the debt, in which case the creditor needs to take that into account.
The creditor supplied certain goods or services that were defective or did not meet the specifications agreed to by the debtor and the creditor.
4. Any debt that remains unpaid.
There needs to be some final amount that the creditor says that the debtor owes it, including any interest, costs, and penalties.
One can use this claim structure to allege most forms of simple debts in Provincial and Supreme Court. Drafters should include the relevant particulars for each element of each checklist. For example, if the claim is debt, the drafter should include details such as the principal sum lent, the relevant interest rate, and the repayment terms. A debt owed by the failure to pay monies under a contract should have the contract specifically described.