Statute of Limitations on Unpaid Invoices (US and UK)

Quick answer: The statute of limitations on unpaid invoices is the deadline to file a lawsuit to collect. In the US it is set by each state and usually runs 3 to 10 years for written contracts and 2 to 6 years for oral agreements, often starting on the due date. In England and Wales it is generally six years.

Most businesses never need to know this number, because invoices get paid or written off long before the deadline. But if a client owes you a significant amount and keeps stalling, the statute of limitations decides how long you have before the law stops helping you. This guide explains how limitation periods work for unpaid invoices, gives examples by US state and for the UK, shows when the clock starts and restarts, and lists the steps to protect your claim.

This is general information, not legal advice. Limitation periods change and depend on facts; check the current statute in your jurisdiction or ask a lawyer.

What is a statute of limitations for an unpaid invoice?

A statute of limitations (called a limitation period in the UK) is a law that sets the maximum time after a breach in which you can start legal proceedings. For an unpaid invoice, the breach is usually the client's failure to pay by the due date. After the period ends, the client can raise the time limit as a defense, and the court will normally dismiss the claim.

Three things decide which period applies:

1. The type of agreement. Written contract, oral contract, open account (a running balance of transactions), promissory note, or sale of goods.
2. The governing law. Usually the state or country where you sue, unless the contract chooses another law.
3. When the claim "accrued." For invoices, typically the payment due date or the date of the last transaction on an open account.

Statute of limitations on unpaid invoices by US state

Every state sets its own periods. The examples below reflect commonly cited state statutes as of October 2026; they can change, and courts sometimes classify invoice claims differently. Verify the current text with your state legislature's website or a local attorney.

State	Written contract	Oral contract	Notes
California	4 years	2 years	Open book accounts have their own provisions
Florida	5 years	4 years	Under Florida Statutes chapter 95
Illinois	10 years	5 years	One of the longer written-contract periods
New York	6 years	6 years	Contract actions under CPLR 213
Ohio	6 years	4 years	Shortened by a 2021 law
Pennsylvania	4 years	4 years	Written instruments under seal can differ
Texas	4 years	4 years	Debt claims generally 4 years

Sales of goods: the UCC four-year rule

If your invoice is for goods rather than services, Article 2 of the Uniform Commercial Code, adopted in nearly every state, generally sets a four-year limitation period from the breach (UCC 2-725). The parties can shorten it by agreement to no less than one year but cannot extend it. Mixed contracts (goods plus installation, for example) are classified by their main purpose, which affects which rule applies.

Statute of limitations on unpaid invoices in the UK

Jurisdiction	General period for contract debts	Source
England and Wales	6 years from when payment fell due (12 years for deeds)	Limitation Act 1980, sections 5 and 8
Northern Ireland	6 years for simple contracts	Limitation (Northern Ireland) Order 1989
Scotland	5-year prescriptive period for most contractual debts	Prescription and Limitation (Scotland) Act 1973

You can read section 5 of the Limitation Act 1980 on legislation.gov.uk. In England and Wales, a written and signed acknowledgment of the debt or a part payment starts a fresh six-year period. UK businesses chasing late B2B payments can also claim interest and fixed compensation; see our guides to statutory late payment interest and the UK late payment law in 2026.

When does the clock start?

For a single invoice with a stated due date, the clock usually starts the day after the due date passes without payment. Some practical examples:

• Invoice dated March 1, 2026, terms net 30. Due March 31, 2026. A four-year period would generally end around March 31, 2030.
• Invoice marked "due on receipt." The clock may start on the invoice date or when the client received it.
• Open account with monthly purchases. Many states start the period from the last charge or last payment on the account.
• Installment agreement. Each missed installment may have its own clock, unless the contract has an acceleration clause and you invoke it.

Clear due dates help. If your invoices say "net 30" without a date, add the actual due date. Our guide to net 30 payment terms explains how to write them.

What restarts or pauses the statute of limitations?

Event	Typical effect (varies by jurisdiction)
Debtor's written acknowledgment of the debt	Often restarts the period
Partial payment by the debtor	Often restarts the period
New written promise to pay	Often restarts or creates a new obligation
Your reminders and demand letters	Generally no effect
Debtor leaves the state or files bankruptcy	May pause (toll) the period
Filing a lawsuit	Stops the clock for that claim

A signed payment plan agreement is useful for two reasons: it gets money moving, and in many places it counts as a written acknowledgment.

Worked example: a contractor's old invoice

A Texas flooring contractor installed $9,350 of flooring for a property manager. The signed estimate included net 30 terms, and the invoice was dated June 2, 2023, due July 2, 2023. The client paid $2,000 on November 15, 2023, then stopped.

Date	Event	Balance
June 2, 2023	Invoice issued	$9,350
July 2, 2023	Payment due	$9,350
November 15, 2023	Partial payment	$7,350
October 2026	Contractor reviews options	$7,350

With a four-year period, the contractor likely has until at least July 2027, and possibly later if the partial payment restarted the clock under Texas law. Because the exact restart rule matters, the contractor should not wait. Sensible next steps are a demand letter this month, then a small claims filing (Texas justice courts hear claims up to $20,000) or a collection agency if the client ignores it. A contractor in this position may also have lien rights, which have far shorter deadlines; see mechanics liens.

Other deadlines that can matter more

The statute of limitations is usually the longest deadline in a collection, not the most urgent one. Watch these shorter clocks:

Deadline	Typical timeframe	Why it matters
Mechanics lien filing (construction)	Often 60 to 120 days after last work, varies by state	Miss it and you lose lien rights against the property
Preliminary notices (construction)	Often within 20 to 60 days of first furnishing work	Required in some states to preserve lien rights
Bankruptcy proof of claim	Set by the bankruptcy court	File on time or you may get nothing from the estate
Contract dispute or notice clauses	Whatever the contract says	Some contracts require written notice of claims within days
Government contract claims	Set by statute or contract	Prompt payment and claims rules have their own timelines

Contractors should read our guides to lien waivers and the Prompt Payment Act alongside this one.

Consumer debts and time-barred debt

If your customers are individuals rather than businesses, extra rules apply once a debt is old. Under the CFPB's Regulation F, third-party debt collectors may not sue or threaten to sue on a time-barred consumer debt. Several states go further and restrict collection or require specific disclosures on old consumer debts. Some states also have rules on whether a partial payment revives a time-barred consumer debt. If you hand old consumer balances to a collector, choose one that tracks these rules by state. See our guide to choosing a collection agency for unpaid invoices for what to ask.

Clients in another state or country

When your client is elsewhere, three questions decide your deadline: where you can sue (jurisdiction), which law the court applies (choice of law), and whether that state has a borrowing statute that imports a shorter foreign period. A choice-of-law clause in your terms, such as "This agreement is governed by the laws of the State of Texas," makes the answer far more predictable. For international clients, enforcement is often the bigger problem than the deadline itself, which is why deposits and milestone billing matter more for cross-border work.

Steps to protect your right to collect

1. Put dates on everything. Invoice date, due date and terms on every invoice. Our free invoice generator includes both fields.
2. Keep the paper trail. Contracts, accepted quotes, delivery proof, emails and payment records for at least the limitation period plus a margin.
3. Track aging. Review receivables monthly and flag anything over 90 days.
4. Escalate on a schedule. Reminder, call, final notice, then outside action. Our invoice collections guide lays out the sequence.
5. Get acknowledgments in writing. If a client admits the debt, ask them to confirm it by email or signed letter.
6. Calendar the deadline. Note the earliest possible expiry date and act well before it.

Records to keep while the clock runs

If you ever need to sue, the court will want proof of the agreement, the work, the amount and the missed due date. Keep these together in one folder per client: the signed contract or accepted quote, every invoice and statement, delivery or completion proof, change orders, all correspondence about payment, and a ledger of payments received. A PDF copy of each invoice, saved on the day you issue it, is far more convincing than a document recreated years later.

Common mistakes

• Assuming the longest period applies. If the claim is classified as oral or as a sale of goods, your deadline may be shorter than you expect.
• Counting from the invoice date instead of the due date, or the other way round, without checking the rule.
• Believing reminders reset the clock. They usually do not.
• Ignoring contract clauses that shorten the period or choose another state's law.
• Waiting until the last month. Courts, process servers and collectors all take time.
• Threatening suit on a time-barred consumer debt. That can break consumer protection law.

Bottom line

The statute of limitations on unpaid invoices gives you years, not months, in most places, but recovery gets harder every month an invoice ages. Treat the limitation period as a hard outer wall and aim to resolve every unpaid balance within the first few months. Start with clear, dated invoices: our invoice generator is free, needs no sign-up, and downloads a PDF built in your browser, so you have a clean record if you ever need to rely on the statute of limitations on an unpaid invoice.