When you are owed money for your services or products, how long do you wait until you sue a customer who doesn’t pay? Did you know that you only have two years from the date that you are owed your money to do so, and if you don’t, you’re out of luck?
The Limitations Act in Ontario gives parties two years from the date they’re owed money to sue for that money back. This was done partially so that the Courts would not be bombarded with older claims. Also, as time passes, people’s memories fade and facts may be forgotten, or even evidence misplaced or lost.
The only time that a debt that is older than two years can be sued on is if the debtor acknowledges the debt or makes a payment. Then your two-year clock starts again.
So how long should you wait before you sue? That is ultimately up to you, but you shouldn’t wait long.
At our Firm, our 30-60-90 Sue™ program allows our clients to create easy procedures to help them get paid. In a nutshell, here’s how it works:
After thirty days an invoice is due, send your customer a friendly reminder that you expect to get paid.
After sixty days, that previous friendly letter should now be a firm one, outlining any accrued interest and that the amount is due immediately.
After ninety days, give them just five days to pay, failing which you will sue them.
Still didn’t get paid? Sue.
And it didn’t take two years to do it.
You did the work. Don’t wait two years to get paid because you deserve to get paid now.
Murray Brown, Paralegal