How long do you have
to recover a debt?

The six-year rule

Most unpaid invoices arise from a simple contract, written or not, and fall under the six-year limit. Contracts executed as a deed have a twelve-year limit, which is rare for ordinary trade debts. The limit applies to starting court proceedings. It does not stop you asking for payment, sending reminders or instructing someone to negotiate, but a debtor who knows the law can simply decline.

When the clock starts

Time runs from the date the “cause of action accrued”, which for an unpaid invoice is usually the day the payment became due and was not made. If your terms are 30 days, the clock starts 30 days after the invoice, not on the invoice date. If you have agreed a later payment date, it starts then.

This is one of several reasons to keep the invoice date, the agreed terms and the due date together in one place.

What can restart it

In England and Wales, a written acknowledgement of the debt signed by the debtor, or a part payment, restarts the six years from that date. An email from the debtor accepting that the sum is owed, or a payment of part of the balance, can therefore extend your position. Once a debt has become statute-barred, however, it cannot be revived by a later acknowledgement.

Keep every acknowledgement and record every part payment. They may decide whether a claim is still possible.

Scotland and Northern Ireland

In Scotland the equivalent rule is prescription, and the general period for a contractual debt is five years under the Prescription and Limitation (Scotland) Act 1973. After five years the obligation is extinguished entirely, not merely unenforceable. In Northern Ireland the Limitation (Northern Ireland) Order 1989 sets a six-year period similar to England and Wales.

If your customer is based in a different part of the UK from you, check which law governs the contract.

The practical time limit

Six years sounds like plenty. In practice the chances of recovery fall long before then:

• Staff move on and the evidence of what was agreed and delivered gets harder to find.
• The debtor’s finances change. A company that could pay last year may be insolvent next year.
• Companies get struck off. Once dissolved, recovery usually means paying to restore the company first.
• Late payers prioritise the creditors who chase. A quiet invoice is an easy one to leave.

A sensible rhythm is a reminder at the due date, a firmer chaser within a couple of weeks, a letter before action soon after, and a decision about outside help within the first few months, not years.