What is the statute of limitations on an unpaid invoice?
Statute of limitations on an unpaid invoice
Short answer
It depends on the state and whether the invoice is treated as a written contract, an oral contract, or an open account. For written invoices, most states allow 4-6 years to file suit; some go up to 10 years. Open accounts (no signed agreement) typically get 3-4 years. After the statute expires, you can no longer sue to collect, but the underlying debt still exists and can be paid voluntarily.
Statute of limitations is the legal deadline for filing a collection lawsuit. Once it passes, courts will not enforce the debt — the invoice is still owed, but the legal mechanisms to collect it are off the table. The clock typically starts running on the date of last payment or last formal acknowledgment, not on the invoice date.
The length of the statute depends on three things: the state where the customer lives, whether the invoice is treated as a written contract, and whether there is a signed agreement attached. For a typical service-business invoice with a signed work order or signed terms, most states treat this as a written contract and allow 4-6 years. California gives 4. Texas, 4 for written, 4 for open account. Florida, 5. New York, 6. Some states (Illinois, Mississippi, Ohio) extend up to 10 for written contracts.
Open accounts — invoices issued without a signed agreement, common in trade and B2B service relationships — typically get a shorter statute. Most states allow 3-4 years. This is one reason getting a signed work order or accepted estimate matters more than most owners realize: it changes the legal clock from 3-4 years to 5-6 years, sometimes longer.
The clock can be reset. Any payment, written acknowledgment, or formal promise to pay generally restarts the statute from zero. This is good for collectors and dangerous for debtors — even a partial payment of $20 on a 6-year-old invoice typically restarts the full statute. Some states require the acknowledgment to be in writing; others accept verbal.
Practical takeaway for small businesses: if an invoice is approaching the statute deadline, you have two options. File suit before the clock runs out, or accept that you can no longer compel collection. Once the statute expires, you can still ask the customer to pay voluntarily — many do, out of goodwill or relationship maintenance — but you cannot use legal pressure. This is general information, not legal advice; if you are near a statute deadline, talk to an attorney in your jurisdiction.