Must I try to collect to preserve rights?

[gprang]

What is the name of your state (only U.S. law)? CA

I have two debts owed to me. The first ($10k) was for consulting work I did, and the second was a business loan ($20k). The $10k is an Account Receivable, and the $20k is an unsecured note.

Neither of the parties has the means at this time to repay me. Both probably would if they could (I know their finances from my work). One of these has been outstanding for about 3 years, and the other for 1.5 years. I know it will do no good to harass them at this time, but eventually I would like to get the money back. From their estates if necessary.

Question: Do I have to make diligent efforts to collect these debts in order to preserve their validity? Or might they assert after some period that I have abandoned my claim? If I need to make a diligent effort, what would satisfy the law?

Thanks!What is the name of your state (only U.S. law)?

[racer72]

The statute of limitations in your state are 4 years for written contracts, 2 years for oral contracts. You will never give up your right to sue for the money but if you wait too long, your debtors can use the SOL as a positive defense. I would suggest talking to a local attorney about collecting the debts, especially the older debt. Both amounts are above the small claims limit of your state. A judgment in California is good for 10 years and can be renewed for another 10.

[gprang]

Thank you very much for your reply!

So, does the SOL date from the original date the debt was incurred, or from the last documented effort to collect?

If the former, then I would have to file suit within that period. Presumably, once the suit is filed, the SOL is superseded by the timely-filed pending suit.

If the latter, then I would just have to keep sending statements to restart the SOL clock.

In any case, I will turn these over to a local attorney today!

[ecmst12]

Typically the SOL starts to run 30 days after the last payment was made. If no payment was made, then 30 days after the first invoice or notice of debt was sent. The nice thing about a judgement is that they are good for a long time, and no harassment is necessary. You may be able to put a lein on property so that you will be paid when the property is sold, or you can just wait until the debtor's finances improve. Chances are sometime within the next 20 years, they will.

[gprang]

Thanks for the excellent advice. This is a great Forum!