Managing unpaid debts is one of the most frustrating parts of running a business, more so when accounts have been overdue for ages. But if you are running a business, you should know that there is a time limit on how long you can legally pursue debt collection through the court system.
In Texas, the time limit (or “the statute of limitations”) for most debts is four years. The clock starts ticking from the date of the last payment or the debtor’s acknowledgment of the debt. Once those four years have passed, the debt becomes “time-barred.”
You can’t sue the debtor in court for a time-barred debt. But the debt can still exist on your books and may still be legally collectible outside of court.
It is a common misconception that debts older than four years just disappear. The debt is still there, and you are always within your rights to ask for payment. But in case the debtor refuses to pay, you will no longer have the option to sue them for a time-barred debt.
This is why you should have an experienced collection agency in Dallas on your team. They know how the law works around time-barred debts and can find ways to recover your money without crossing any legal boundaries. For example, even though lawsuits are not an option, agencies can still send written reminders or negotiate out of court settlements with debtors.
If you are running a small business, four years can fly by before you realize an overdue account has become time-barred. Therefore, you need to keep up with your invoices and payment reminders.
Having a debt collection agency for small businesses on your team can greatly reduce the risk of missing this critical window. These professionals have tools and systems to track debts in real time and make sure you never lose the chance to collect funds through legal channels.
Outsourcing collections can sound like an unnecessary expense to some business owners. But when your invoices are going unpaid, a good agency can save you so much of your time and money. Instead of going after payments, making countless follow-up calls, and dealing with mountains of paperwork, you can leave those tasks to a good collection agency.
Even more importantly, a collection agency will help you avoid making costly mistakes. They are all too familiar with Texas laws and will make sure your collections are effective and fully compliant.
If you feel as though you are spending too much time or resources going after overdue accounts, it may be time to call a professional debt collection agency. Williams Rush & Associates LLC can help small businesses like yours resolve outstanding debts and prevent future payment delays. Contact WRA today to learn more about our services.