Seeking to keep a debt collection claim alive by sending repeated invoices or statements to delinquent customers? You may be surprised to learn how the invoice date affects your New York debt collection case.
New York’s statute of limitations dictates your ability to start a debt collection claim in New York whether by demand, mediation, arbitration, or litigation. The statute of limitations is the legal amount of time that you have to sue for an outstanding amount owed.
When Does the Statute of Limitations Start?
So when does the clock start? It’s not from the invoice date. The statute of limitations starts “from the time the cause of action accrued.” For services rendered, this means your time to bring a claim starts from the date of service. For goods sold, it’s the time from when you sold the goods.
It is important to distinguish the last date of services rendered or goods sold from the date of the invoices because sometimes, a company can take a long time to issue an invoice. This, however, will not affect the statute of limitations. If bringing suit in court, you will need to note the date the transaction occurred to avoid being past statute.
The date of the invoice or the date you sent the statement of account is not relevant since these events do not trigger the statute of limitations. The New York court’s view is that to hold otherwise would allow a creditor to extend the statute of limitations indefinitely “by simply failing to make a demand.”
Example: Why Invoice Date Doesn’t Affect Debt Collection Timelines
A company performs services for a client. The last date of services rendered was January 1, 2023. However, the company doesn’t send an invoice to the client until June 1, 2023. The debtor doesn’t make any payments towards the invoice amount. How much time does the company have to bring a lawsuit against the client?
In this case, the last date to bring suit would be six years from January 1, 2023, the last date of service, or, if applicable, four years from the last delivery of goods.
If the debtor issues a voluntary partial payment towards the amount owed, then generally, the clock on the statute of limitations will reset. However, notwithstanding any payments from the debtor, the statute of limitations will be either four or six years from the date the underlying transactions occurred.
Do you have a debt collection matter you’re looking to resolve? Contact Frank, Frank, Goldstein and Nager. We have the experience that pays.
