Limitation is not a deadline. It is a write-off nobody has booked

A sales ledger is rarely written down. It disappears.

That is not a figure of speech. A monetary claim has a legal lifespan, and as a rule it is three years. Throughout that period the claim is fully valid — it can be collected, it can be sold, it can be taken to the bailiff’s court. The day after, none of it can. There is no gradual transition, no partial validity and no notice from anyone.

::figur[klippen]

That is what makes limitation such an expensive mistake, and it is what no finance function is built to spot. A spreadsheet showing aged receivables shows a steadily rising risk. The law does not recognise a steadily rising risk. The law recognises a cliff.

What does NOT interrupt limitation

Here lies the most expensive misunderstanding in the whole of debt collection, and it goes like this: “but we have sent reminders.”

A reminder does not interrupt limitation. Ten reminders do not interrupt limitation either. A phone call, an email, a nudge, a friendly conversation at a trade fair — none of it interrupts limitation. You can chase a debtor every week for three years and end up holding a claim that has ceased to exist.

In practice, limitation is interrupted in two ways.

The debtor acknowledges the debt. The acknowledgement can be express — a signature on a voluntary settlement, an instalment plan, an acceptance of a statement of account. It can also lie in conduct: an instalment payment is an acknowledgement. When that happens, a new period runs from the acknowledgement. That is why a signed instalment plan is worth so much more than a promise over the phone: one restarts the clock, the other does nothing.

You take legal steps. A payment order, a writ of summons, filing the case with the bailiff’s court. That is the route used when the debtor will not acknowledge anything at all — and it is the route that has to be used in good time, not in the final week.

The paper decides the lifespan

The same claim against the same debtor has a widely different lifespan depending on what it is written on.

::figur[grundlag]

It is one of the most overlooked consequences of seeing a case through to the end. A judgment is not only a means of getting the money now. It is also an extension of the claim’s lifespan from three years to ten — and that makes a difference precisely in the cases where the money is not there yet.

Because that is the situation that arises most often: the debtor cannot pay today. You can close the case and write it off, or you can obtain an enforceable instrument and wait. With an enforceable instrument, waiting is a strategy. Without one, it is a write-off with delayed effect.

The rule that costs the most, because nobody thinks about it

As a rule, the period runs from the earliest point at which you could have demanded payment — that is, from the due date. Not from the day you sent the case to debt collection. Not from the day you discovered the problem.

That means a case that has been sitting in a folder for two and a half years is not a case that is running slightly late. It is a case with six months left to live.

What needs to be done

Run an aged receivables report and look at everything over 24 months. Not in order to write it off, but to find out what it is written on. If there is a judgment, you have seven years left. If there is a signed instalment plan, you know when the clock was last reset. If there is only an invoice and a folder of reminders, there is a date nobody has written down — and it is coming.

There is no point in time at which it is too early to do something about a claim. There is exactly one point in time at which it is too late.