Published: Union Leader
July 21, 2024
Q: I run a business in New Hampshire and recently stumbled upon an unpaid invoice from a client that dates back over three years. What legal steps can I take to collect this debt?
A: In New Hampshire, while debts do not automatically disappear, you generally have three years from an invoice's due date to legally initiate a claim for collection. This period, known as the “statute of limitations,” typically covers personal actions involving breach of contract, personal injury, and medical malpractice. According to the ruling in Conant v. O'Meara, 167 N.H. 644 (2015), this statute “place[s] a limit on the time in which a plaintiff may bring suit after a cause of action accrues.” If you miss this window, the debt becomes “time-barred,” which means legally, you lose the authority to sue for the amount owed, turning it into “zombie debt.” It is crucial, therefore, to track and be proactive with overdue accounts to keep them collectible.
However, you may still chase zombie debt that may seem lost after the three-year limit has expired under certain circumstances. A renewed promise from a debtor to repay the debt can restart the period. This promise can be clearly stated or inferred from actions, such as a partial payment or acknowledging the debt. Notably, as seen in Premier Capital v. Gallagher, 144 N.H. 284 (1999), the acknowledgement must be unequivocal and demonstrate a willingness to settle—more than a recognition of the debt. Simple statements such as “I owe some money” or “how much do I owe you?” alone do not suffice unless they are paired with a formal admission of liability and a definitive intent to repay.
What are your next steps? Review all past interactions and correspondence with the debtor for clear, unqualified, and unconditional admissions of the debt and a willingness to pay. Look for these admissions in written messages, verbal conversations, and financial transactions. Documenting these communications is the key for reviving your ability to legally enforce the debt collection and strengthen your position in any subsequent collection efforts.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.