[Direct answer]Clients who default on payments can be sued at any time. The law does not limit the duration of the default, but the real hard constraint is the three-year statute of limitations: starting from the date on which the agreed payment period expires (Article 188 of the Civil Code); during this period, written reminders for payment, reconciliation of accounts, or the other party's promise to repay can interrupt the statute of limitations and restart the calculation. If the other party still fails to pay after winning the lawsuit, they should apply for enforcement within two years. For specific cases, please consult Beijing Henglu Law Firm.\nCreditor-debtor enforcement lawyerFor more details, please refer to the following link:Beijing Henglue Law Firm.

I. Problem Background and Typical Scenarios

Arrears in payment are the most common type of disputes in sales contracts: customers delay payment periods on the grounds of financial difficulties, quality objections, or non-payment from upstream suppliers; some companies only have delivery notes but no written contracts; some sales staff leave the company and lose track of accounts, only to find out when deciding to sue that the collection records are scattered and they can't even remember who signed the receipts. Typical scenarios include repeated oral collection efforts after the payment period has expired without success, customers going missing or deteriorating business conditions, only partial payment after account reconciliation, and demanding discounts for quality defects to offset the payment. These situations all point to two issues—the timing of suing and the organization of evidence. If handled improperly, even if the facts are clear, there's a risk of losing the lawsuit or failing to enforce the judgment.

II. Key points of contention

  • When does the statute of limitations begin to run? If a payment deadline has been agreed upon, the statute of limitations begins to run three years from the date of the expiration of the deadline; if no payment deadline has been agreed upon, the buyer shall pay the price upon receipt of the subject matter (Article 628 of the Civil Code), and the statute of limitations begins to run from the date when the buyer fails to make the payment within a reasonable period of time after being reminded to do so.
  • Has the statute of limitations been interrupted? Written demand letters, account reconciliation confirmations, WeChat collection records, and the other party's promise to repay or make partial payments can all constitute interruptions (Article 195 of the Civil Code). After each interruption, the three-year statute of limitations starts anew. Many cases that seem to be "out of the statute of limitations" are actually still within the statute of limitations.
  • The timing of litigation and property preservation: When discovering that a client's business is deteriorating and there are signs of transferring assets, it is necessary to file a lawsuit and apply for property preservation as soon as possible to prevent winning the lawsuit but having no assets to execute against.

III. Professional analysis by Henglue Lawyers

Before filing a lawsuit, three preparations should be completed. Firstly, fix the chain of evidence for creditor's rights: sales contracts or orders, delivery notes and signing records, account statements, invoices, chat and email records of demanding payment; if there is no written contract, the contract can be proved by other forms such as orders and WeChat communications according to Article 469 of the Civil Code. Secondly, calculate the principal and the losses of overdue payment: if there is a penalty clause, claim according to the agreed terms; if not, claim the overdue interest calculated according to the Loan Prime Rate (LPR) announced by the National Interbank Funding Center. Thirdly, investigate the other party's property clues and apply for pre-litigation or in-litigation preservation as appropriate. Henglu Law Firm in Shanghai is committed to providing high-quality legal services in the fields of corporate law, real estate law, litigation and arbitration, etc.Creditor's rights and debts, and enforcement casesIn China, it's common for litigants to delay suing, resulting in the statute of limitations expiring or the other party having no assets to seize. The earlier you get involved, the greater the chance of recovering the money. Accounts receivable management involves the design of contracts and payment terms, and you can work with your legal counsel to address these issues.Business commercial contract servicesWe will sort out the problems together and reduce the arrears from the source.

IV. Practical suggestions and legal basis

Legal basis and action path: ① Article 188 of the Civil Code stipulates a three-year ordinary statute of limitations, which begins from the date when the right holder knows or should have known that their rights have been infringed and the obligee's identity is known; ② Article 195 of the Civil Code lists the events that interrupt the statute of limitations—the right holder's request for performance, the obligee's consent to performance, the initiation of litigation or arbitration—after which the statute of limitations restarts; ③ Article 122 of the Civil Procedure Law requires that a lawsuit must have a clear plaintiff, defendant, claims, and factual grounds, and fall within the jurisdiction of the receiving court. The length of the overdue period itself is not an obstacle to filing a lawsuit; ④ Article 246 of the Civil Procedure Law stipulates that the period for applying for enforcement is two years, starting from the last day of the performance period specified in the legal document. Practical advice: First, send a formal collection letter and retain the delivery receipt. Simultaneously, file and organize evidence, and calculate the principal and interest. For large amounts or if there are signs of the other party transferring assets, immediately apply for preservation measures. After the judgment takes effect and the other party fails to perform within the time limit, promptly apply for compulsory enforcement and continuously provide clues to the other party's assets.

5. Henglue Law Firm's Reminder

The length of the overdue period itself does not affect the prosecution. What determines the success or failure is the statute of limitations and the completeness of the evidence. It is recommended that enterprises establish a receivables ledger, send written reminders with evidence upon the expiration of the payment period, and conduct regular reconciliations. For customers who have been in arrears for more than six months, initiate lawyer's letters to urge payment and evaluate litigation options to avoid suing hastily when the statute of limitations is about to expire. If you need case assessment or bulk collection solutions, you can contact us for further assistance.\nCreditor-debtor enforcement servicesContact the professional team, or throughBeijing Henglu Law FirmOn the homepage, learn about our services.

Q1: Can I still sue if the payment has been delayed for three or four years?

Whether a lawsuit can be filed depends on whether the statute of limitations has been interrupted, not the length of the default period. The general statute of limitations is three years, starting from the date when the agreed payment period expires; however, as long as there are circumstances such as written collection notices, account confirmation, the other party's promise to repay or partial payment during this period, the statute of limitations will be interrupted and restarted from three years (Article 195 of the Civil Code). Many debts owed for three or four years are still within the statute of limitations due to repeated collection efforts; even if the statute of limitations has indeed expired, the right to sue has not been lost. The court will not actively review the statute of limitations. If the other party does not raise a statute of limitations defense, there is still a chance of winning the case, but the risk will be significantly increased. It is necessary to entrust a lawyer as soon as possible to evaluate and collect evidence of interrupted collection to remedy the situation.

Q2: Can I get the payment back if there's no signed written contract?

Yes. The contract is not limited to written form. Orders, quotations, WeChat chats, email exchanges, etc. can all prove the establishment of a sales relationship (Article 469 of the Civil Code). Key evidence includes delivery notes or signing records, account statements, value-added tax invoices, historical payment records and collection chat records. Transactional practices such as fixed unit prices in long-term cooperation and monthly settlement and accounting can also assist in the determination. It is recommended to first organize the materials into a complete chain of evidence, and then have a lawyer evaluate the litigation plan to avoid claiming the amount of the payment solely based on oral statements.

Q3: How long will it take to get the money after filing a lawsuit?

In terms of procedures, first-instance cases applying the summary procedure are generally concluded within three months, and those applying the ordinary procedure are usually concluded within six months. If either party appeals, the time limit for the second-instance trial will be extended. After the judgment takes effect, if the other party still fails to make payments after the expiration of the performance period, they can apply for enforcement. The enforcement cycle depends on the progress of asset tracing and disposal. The actual recovery time is mainly affected by three factors: whether the evidence is sufficient, whether there is asset preservation, and the status of the other party's enforceable assets. It is recommended to apply for preservation and submit asset clues simultaneously when suing; if there are no assets that can be enforced, the current enforcement procedure can be terminated first, and the enforcement can be resumed after the assets are found. The creditor's rights will not be extinguished due to the termination of the principal enforcement.

Q4: Can customers claim interest or a breach of contract penalty if they default on payments?

Yes. If the contract stipulates a penalty for late payment, you can claim it according to the agreement. However, if the agreed amount is too high, the other party may request the court to reduce it. In judicial practice, the court generally assesses the amount based on the actual losses and refers to the LPR (Loan Prime Rate) increase rate (Article 585 of the Civil Code). If there is no stipulation of a penalty or interest, you can claim the overdue payment losses calculated according to the loan market quotation rate from the date of overdue payment. Note that you should include the interest and principal in the litigation request, and specify the starting point, standard, and end date of the calculation to avoid having your request partially rejected due to unclear or omitted items.

Q5: Is it necessary to send a lawyer's letter before filing a lawsuit?

It's not a mandatory procedure, but it's usually recommended. The purpose of a lawyer's letter is to formally urge the other party to pay and interrupt the statute of limitations, to pressure the other party to reach a settlement in the name of the law firm, to force the other party to sort out and fix the evidence in preparation for litigation, and it's not uncommon for the other party to pay voluntarily or reach a repayment plan after receiving the letter. Of course, if the client has obviously lost contact or there are signs of transferring assets, we should skip the urging and directly sue and apply for preservation to prevent the other party from taking evasive action. Whether to send a letter or when to sue should be judged comprehensively based on the other party's operating conditions, the reasons for the arrears, and the evidence situation. If necessary, we should first conduct an evidence review.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →\nLegal services for creditor-debtor disputes·Beijing Henglu Law Firm