Three years, and the clock resets more often than you think
Practical tips to reduce unpaid invoices — and to decide when to escalate.
Three years. That is the period after which an ordinary commercial debt stops being recoverable in Quebec.
Most business owners know the figure roughly. What they know less well is when it starts, what stops it, and above all what restarts it — because that is where the good news, and the unpleasant surprises, live.
First, two false beliefs
“I invoiced late, so I lost my right.” No. Invoicing late does not extinguish a debt. If you delivered the goods or performed the service, the debt exists. An invoice sent six months after the fact is still an invoice; it may complicate proof and irritate the customer, but it does not make the right to be paid disappear. This confusion is widespread and it causes perfectly valid receivables to be abandoned.
“I sent a demand letter, so the clock has stopped.” Also no — and this one costs files. A demand letter does not interrupt prescription. It puts the debtor in default, it starts interest running, it is often necessary before suing. But the clock keeps turning while you wait for an answer.
If your receivable is approaching three years, sending a letter and waiting two months is not a strategy: it is two months less.
What actually interrupts the period
1. Acknowledgment of the debt by the debtor
This is the most useful mechanism and the least known. Where the debtor acknowledges the debt, prescription is interrupted and a fresh period begins to run, from zero.
Not “is suspended”. Not “picks up where it was”. From zero.
And the acknowledgment may be direct or indirect:
- an email saying they will pay, or asking for more time;
- a partial payment — paying $500 on $9,000 implicitly acknowledges the balance;
- a request for a payment arrangement;
- a verbal acknowledgment, on the phone, which counts too.
A verbal acknowledgment counts, but it has to be proved. Hence the simplest practical rule in this article: after every conversation in which the customer admits the debt, send a confirming email. “Further to our call today, the $9,400 balance will be settled by 30 November.” Three lines, and you have just turned words into an exhibit.
2. A judicial application
Filing a judicial application interrupts prescription. One condition attaches: the application must be served within 60 days — filing without following through is not enough.
What this changes in how you manage your accounts
Your old accounts are not all dead
You probably have, in your receivables, debts you believe are prescribed. Before writing them off for good, ask one question: has there been an acknowledgment since the due date?
A partial payment fourteen months ago. An email last year where the customer wrote “we'll sort this out soon”. A payment arrangement that was never honoured. Each of those reset the clock, and the debt you thought was extinguished may still have two years to run.
It is worth looking. A written-off receivable is a straight loss; a recoverable one is cash.
Collection calls are not neutral
That is the flip side. If your follow-ups extract an admission from the debtor — an email, a token payment, a promise — they work in your favour as more than pressure. They extend your horizon.
If on the other hand your follow-ups produce only silence, they stop nothing. Six months of unanswered calls are six months of prescription spent. So the question is not “should I chase again” but “is my chasing producing anything in writing”.
You cannot extend the period by contract
A useful point for anyone revising their terms of sale: prescription periods are fixed by law and cannot be varied by agreement. A clause providing for a five-year period does not protect you. This is a real difference from Ontario, where parties to a business agreement have latitude that Quebec law does not recognize.
What your documents can do, by contrast, is produce acknowledgments. A statement of account the customer countersigns, a year-end balance confirmation, a signed delivery slip attesting receipt: these are documents that, besides proving the debt, may constitute an acknowledgment.
Three habits
- A marker in your receivables. For each unpaid invoice, record the due date and the date of the last acknowledgment. It is the second date that counts. A column in a spreadsheet is enough.
- An email after every conversation. The three-line rule above. It is the highest-return action in this article.
- An annual review of old accounts. Once a year, before writing anything off, look for an acknowledgment. And if an account is genuinely approaching its deadline with no recent acknowledgment, that is the moment for a decision — not for one more follow-up call.
The takeaway
The three-year period is not a fixed countdown. It is a clock the debtor's own behaviour resets, often without them realizing it, and that your own letters do not touch.
A creditor who understands that asymmetry manages their accounts differently: less effort spent applying pressure, more spent getting things in writing.