When collecting past-due invoices in New Jersey, the Statute of Limitations is normally 4 years to bring a suit for goods and 6 years for services. But missing this time isn’t always fatal, since the facts of a case sometimes restart the statutory period either before or after it’s expired. This article will discuss what facts will restart the SOL, and how you can prove them.
3 Situations Restart The Statute Of Limitations
When collecting past-due invoices, 3 situations will restart the SOL for another 4 or 6 years, whether or not it’s already expired:
- a written and signed promise to pay the debt;
- a written and signed admission of the debt, with a stated or implied promise to pay it; and
- a partial payment plus an indication (by word or deed) that the customer recognizes the balance and intends to pay it.
Consider these 3 scenarios and whether they renew the SOL: Customer A calls to say it’s sending payment. Customer B writes that it owes the money and will send it. And Customer C sends a partial payment, with a follow-up call saying it’ll send the balance. However, none of them actually pays you, and the statutory date passes.
A’s phone call doesn’t restart the SOL, because the promise to pay must be written and signed. However, B sent a written admission and said it would pay — as long as it signed the letter or email (a typed signature would count), the statutory clock restarted. And C’s partial payment, coupled with its stated intent to pay, also restarts the statute.
Your Records May Defeat The Statute Of Limitations
If you find yourself beyond the 4 or 6-year mark, don’t assume you’re time-barred. Your records may reveal, for example, helpful emails and payments that renewed the statutory period. A look at your correspondence, payment history, and other records may form a basis for restarting the statute and preserving your claim.
For more information on collecting past-due invoices, or if you’d like to discuss a specific collection issue, call me at 856-667-1669 or contact me here.
This material is for informational purposes only and should not be construed as legal advice. No person should rely on this information without seeking the advice of an attorney.