Aging Accounts

The age of an account can have a great affect on it’s collectability. In most circumstances, the older an account is the more difficult it is to collect.

As time goes on it can become more difficult to locate a debtor. People move to new homes, new towns, new states. They change phone numbers and jobs. They may do this several times over the course of a few years. Each change can make locating a debtor more difficult. If you can’t find them, you can’t get payment from them.

The collectability of an account goes down as the account nears the statute of limitations. The statute of limitations on an account is the number of years you have to pursue an account from the last date of charge or payment (whichever is most recent). For example, the statute of limitations in the State of California is 4 years for a written contract. You would have 4 years from the last date of payment or the last charge to take that account to court. Each state decides the statutes of limitations for different types of accounts – open accounts, judgments, oral contracts,etc.

The faster you can move forward on an outstanding account,the more likely you are to receive the payment due to you. This is truly a situation where time is money and the more time you let pass the greater the chance you’re letting your money slip away.

Statutes of Limitations by State

One Response to “Aging Accounts”

  1. Martain says:

    True I know that has happened to me… the longer I have outstanding accounts or invoices the harder it becomes to pay them. As the months tick over the more “debt” accumulate and then it becomes this vicious act of juggling them. If you only pay for them when they arrive or make arrangements if you can’t afford to settle the whole thing then you’re helping yourself and your future financial status. Debt is always difficult to stomach.