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Business Debt/debt statute of limitations in CA


My company worked with a non profit supplier from 2005 - Dec 2008. Date of their last invoice to my company. We could not afford to pay the last several invoices as we were caught big time in the 2008 crash losing 70% of our sales. Residency of the Non profit is California, residence of my C corporation is Hawaii. A debt collection agency has just got in touch to collect the debt.   As it is over 4 years and we had a written contract can I take the position that it is beyond the statute of limitations or does the out of state location of my company somehow negate this? When it became apparent that we were in financial trouble in 2009 the nonprofit CEO said it was OK if we could not afford to pay off the debt to them so I am surprised at this attempt to collect.

Thanks for your inquiry. The statute of limitations in CA is four years for written, 2 for verbal. In HI it is 6 for each listed below. Please understand that debts that have passed the statute of limitation are known as time-barred debts. Because you assume the debts have aged past the statute of limitation in your state doesn't mean you no longer owe. It just means the creditor can't pursue getting a judgment against you.
This is true for the 4 different types of debt including;

•Oral Agreements - just as they sound, made by oral contract. Nothing was in writing.
•Written Contracts something was signed by you and the creditor.
•Promissory Note is a written agreement to pay back a debt in certain payments, at a certain interest rate, and by a certain date and time.
•An Open-Ended Account is an account with a revolving balance that you can repay and borrow. Credit cards are open-ended accounts.

Unless you can absolutely know the last date you made a payment to the creditor, know that making another payment of even $1 will renew that statute for another term...You have waited a long time to address this, perhaps something can be worked out in a more amicable fashion in the future. An alternative is to offer a smaller settlement to close out the account and stop further collection actions. Hope this is helpful.

Christine Janklow

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Christine Janklow


As a business debt settlement and restructuring veteran, I invite you to inquire about all aspects of business debt solutions to best determine which may be most appropriate. If you have questions such as: What is debt settlement and how process provide debt relief to my business? What options are available to deal with my business debts? Is it possible for a business owner to negotiate their own settlements? Why is debt settlement preferable to filing a bankruptcy or debt consolidation? Why are creditors willing to provide settlements to a business? How will settling debts affect credit scores? or How to rebuild a business after debt is eliminated. Please ask it now! For more information regarding how debt settlement can help your business, please inquire. If this is your business situation time may play a very important factor in getting matters resolved proactively before they have negative affects on the business.


My expertise is specific to providing business solutions that will have profound positive impacts on the financial health of businesses. I have 25 years experience as an entrepreneur and have developed national sales programs; strategic alliances; product development; marketing programs; business and turnaround plans and debt settlement programs all providing methods to improve the financial outlook for large and small businesses. In the area of commercial debt settlement I have over 10 years experience working with large and medium corporations and closely held businesses to enable successful debt reduction and turnaround. I am a professional debt arbitrator and have negotiated with major banking institutions as well as vendors, suppliers and other trade creditors.

Provisors;Turnaround Management Association; Los Angeles area

Accounting Today; Web CPA; National Restauarant Association;Los Angeles Daily News; Today Magazine Monthly series of business articles entitled "Brand News."

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