If you are stuck with unpaid invoices, loans that are not being repaid or rent arrears, selling the debt is one of the quickest ways to recover part of your money without spending years chasing it. In this guide we explain, step by step, how debt sales work across Canada.
What does selling a debt mean?
Selling a debt means assigning your right to collect it to a third party (the buyer or investor) in exchange for an agreed price, always below the face value of the debt. Legally this is done through an assignment of debt, a concept recognised in every province and territory. The original creditor receives immediate payment and stops owning the receivable.
From the moment the assignment takes effect, the new owner is the party entitled to collect from the debtor, on the same terms the debt already had.
Step 1: check that your debt can be sold
- You must be the legitimate owner of the receivable.
- The debt must be due and payable: you cannot sell amounts still within their payment terms.
- It must be a provable money debt: invoices, contracts, small claims judgments, acknowledgements of debt, and similar.
Step 2: gather your documentation
The more documentation you have, the more attractive your debt becomes: invoices and delivery slips, signed contracts, demand letters, emails, NSF cheques, and of course a court judgment if you have already litigated. The Government of Canada business resources can help you keep records in order.
Step 3: set a realistic sale price
The price depends on the age of the debt, the debtor's solvency and the paperwork available. As a general rule we recommend a minimum discount of 20% on the face value in CA$, so the deal is worthwhile for investors. Older or harder-to-collect debts may need bigger discounts.
Step 4: list your debt where the buyers are
Debtalia is a marketplace that connects sellers directly with buyers — Debtalia never buys your debt itself. You list your receivable, your listing stays anonymous, and interested investors, law firms and funds contact you directly. There is no commission on the sale: the full agreed price is yours.
Step 5: negotiate and sign the assignment
When an investor is interested, they reach you directly. Once the price is agreed, an assignment agreement is signed and the buyer pays you. The debtor is then given a notice of assignment in writing, so they know to pay the new creditor.
Conclusion
Selling a debt is a legal, safe and quick process that gives you immediate liquidity without the cost and uncertainty of court action. If you are owed money, do not write it off: put it up for sale on Debtalia and let the market find your buyer.
