[Direct answer]When the payment is in arrears, proceed in the following order: first, verify and fix the evidence of the debt, such as contracts, delivery receipts, invoices, chat records, etc.; second, send a written reminder or a lawyer's letter to exert pressure and interrupt the statute of limitations; third, negotiate a repayment plan and formalize it in a written agreement; fourth, if the other party still fails to pay, apply for a payment order or initiate litigation as appropriate, and simultaneously apply for property preservation; fifth, if the other party still fails to perform after winning the lawsuit, promptly apply for enforcement. According to Article 188 of the Civil Code of the People's Republic of China, the statute of limitations is three years; Articles 577 and 579 stipulate that the other party shall continue to fulfill its payment obligations and compensate for losses. If no claim is made within three years and there are no interruptions, the right to win the lawsuit may be lost, so it is necessary to implement regular management of accounts receivable.

I. Problem background and typical scenarios

SMEs are in a disadvantageous position in the supply chain, and payment defaults are the most common operational risks: some customers delay payments repeatedly on the grounds of financial difficulties, others reduce prices and refuse to pay on the pretext of quality defects, and some even change their contact persons and disappear. Many business owners are reluctant to chase payments due to maintaining cooperative relationships, and only file lawsuits when the other party's business deteriorates or even collapses. In practice, the first three months after a payment default are the golden period for collection, as the other party usually still has the ability to pay; after one year, the recorded debt may only be a piece of paper. Making debt collection actions proactive and procedural is a must for SMEs to safeguard their cash flow.

II. Key points of contention

  • The amount of the claim and the evidence: When there is no written contract, whether the delivery notes, reconciliation statements, invoices, and WeChat chat records can form a complete chain of evidence directly determines whether the plaintiff can win the case and enforce the judgment; the identity of the signatory and the basis of the unit price are the two most frequently attacked points in the courtroom.
  • Quality defense and deduction: If the other party claims to refuse to pay or offer a discount due to quality issues, it is necessary to distinguish whether these are genuine defects or excuses for delaying payment. Whether there is an agreement on the acceptance standards and the time limit for objections, and whether the other party has raised objections in writing within a reasonable timeframe, are key factors in the determination of the case.
  • The statute of limitations and the timing of preservation: The three-year statute of limitations starts from the expiration of the agreed payment period. Collection records are the core evidence to interrupt the statute of limitations. If you find signs of the other party transferring assets, the earlier you take preservation measures, the greater the probability of recovering the payment.

III. Professional analysis by Henglue Lawyers

Henglue Lawyers have observed in handling loan-related disputes that the effectiveness of recovering payments depends on whether three key steps are in place. First, ensuring a complete chain of evidence: contracts, orders, delivery receipts, acceptance records, reconciliation confirmations, and invoices and payment records must correspond to each other. If any link is missing, it should be supplemented. For example, if there is no delivery receipt, the other party can be obtained to confirm it with a payment reminder or admit it in chat records. Second, combining legal procedures: For clear creditor-debtor relationships and fixed amounts, the People's Republic of China Civil Procedure Law allows applying for a payment order, which is cost-effective and time-efficient. However, if the other party raises written objections, the order will lose its legal effect. It is necessary to first assess the other party's willingness to cooperate. The conventional approach is to sue and apply for preservation of evidence. If preservation can be completed before or after filing a lawsuit, the scope for mediation and enforcement will be significantly greater. Third, conducting in-depth investigations of the counterparty: If the counterparty is a company, verify the shareholders' investment and liquidation status. For sole proprietorships where the shareholder cannot prove independent assets, joint and several liability can be claimed. If the counterparty is suspected of criminal offenses such as contract fraud, it is also necessary to evaluate the connection between criminal reporting and civil recovery. For old debts over two years, conduct a statute of limitations review before deciding on a litigation strategy to avoid winning the lawsuit but losing the statute of limitations. 恒略律师在处理货款类纠纷中观察到，回款效果取决于三个动作是否到位。一是证据闭环：合同、订单、送货签收、验收记录、对账确认、发票与付款流水逐环对应，缺哪环补哪环；只有送货单没有签收的，可通过催款函获得对方盖章确认或在聊天记录中自认。二是程序组合：债权关系清晰、金额确定的，可依《中华人民共和国民事诉讼法》督促程序申请支付令，成本低、周期短，但对方提出书面异议即失效，需先评估对方的对抗意愿；常规路径是起诉加保全，能在立案前后完成保全的，调解与执行空间显著更大。三是主体深挖：对方是公司的，核查股东出资与注销情况，一人公司股东不能证明财产独立的可主张连带责任；交易对手涉嫌合同诈骗等刑事犯罪的，还应评估刑事报案与民事追偿的衔接路径。拖欠超过两年的老账，先做时效体检再决定起诉方案，避免赢了官司输了时效。

IV. Practical suggestions and legal basis

At the legal basis level: Article 188 of the Civil Code (implemented on January 1, 2021) stipulates a three-year statute of limitations, and Article 195 stipulates that the statute of limitations is interrupted and recalculated when the right holder submits a performance request to the obligee or initiates legal proceedings; Articles 577 and 579 establish rules for the breaching party to continue to perform monetary obligations; Article 585 stipulates the rules for determining and adjusting the liquidated damages and compensation for losses. At the practical advice level: Control the credit limit for new customers' first orders, and the payment period should not exceed industry norms; Check the age of accounts receivable monthly, and make phone calls for collection within 7 days of overdue, send written notices for collection within 30 days, and initiate legal proceedings within 90 days; Always keep written records of collection efforts, and archive and preserve emails, letters, and chat records; Apply for preservation of accounts, real estate, or accounts receivable simultaneously with the lawsuit for large-scale debts. A complete solution for debt recovery and enforcement can be combined with the above measures.Creditor-debtor relations and enforcement case servicesDesign; daily contract templates and credit approval systems. You can learn more about them here.Intellectual property protection and corporate legal services.

5. Henglue Law Firm's Advice

When recovering debts, it's best to avoid two extremes: first, being too polite to delay collection for too long, which results in both the loss of the statute of limitations and the debtor's ability to repay; second, collecting debts emotionally, such as insulting, blocking doors, and seizing goods, which may turn you from a creditor into an infringer. Under the standard approach, every collection letter and every reconciliation are evidence for litigation and bargaining chips for mediation. If you find that the other party is suspected of fraud under the guise of debt default, such as losing contact after receiving the goods, reselling the goods at a low price, or forging the qualifications of the principal, you can take corresponding measures.Criminal defense and criminal case filing servicesEvaluate the criminal reporting path and proceed with civil compensation in parallel. If you are currently troubled by debtors who default on payments, it is recommended that you sort out the creditor's proof as soon as possible and take legal action through the appropriate channels.Legal services for corporate commercial and contract disputesDevelop a recovery plan.

Q1: How long can I wait before suing for unpaid debts?

In legal terms, you can sue at any time as long as the creditor's rights are clear and the statute of limitations has not expired. There's no need to wait until a certain deadline. However, from the perspective of recovering payments, it's most prudent to initiate collection procedures immediately after the agreed payment period expires. It's safest to evaluate whether to sue and apply for preservation measures around 90 days after the overdue date, as the debtor's assets are less likely to be disposed of at this time and the evidence is still fresh. The statute of limitations is three years, starting from the date the agreed payment period expires or the date the creditor's rights are impaired. During this period, each written reminder can interrupt the statute of limitations and restart the calculation. For long-standing unresolved debts, lawyers should first conduct a review of the statute of limitations and evidence, and then determine the timing of the lawsuit and the amount of the claim.

Q2: If no written contract is signed, can we only recover the payment with the delivery notes and the reconciliation records?

Yes. The contract is not limited to written form. The delivery note stating the product name, quantity, unit price and signed by the other party, together with the confirmation of price and payment in the reconciliation statement, invoice, and chat records, can prove the establishment of the sales contract relationship and the amount of the arrears. The actual performance itself can corroborate the existence of a transaction agreement between the two parties. The risk lies in the identity of the signatory and the basis of the unit price: whether the signatory is an employee of the other party, and whether the unit price has been confirmed in writing. The other party often denies this in court, so it is necessary to supplement the evidence with authorization documents, social security records, or past transaction practices to corroborate it.

Q3: What should I do if the other party refuses to pay the goods on the grounds of quality issues?

First, review two points: whether the contract stipulates acceptance standards and objection deadlines, and whether the other party has raised written quality objections within a reasonable period. If an objection deadline has been stipulated and the other party raises an objection after the deadline, the quality is generally deemed to comply with the contract. If there are indeed defects, it is necessary to distinguish whether the defects are partial and can be repaired, or whether there is a fundamental breach of contract, and claim corresponding discounts, repairs, or return processing accordingly. If the other party only delays payment or refuses to provide evidence based on oral quality issues, you can require them to provide testing or appraisal evidence in litigation. In daily operations, it is the most effective way to resolve quality disputes to keep the acceptance certificates for each delivery and have the other party confirm them in writing.

Q4: How to investigate the other party's assets and apply for preservation before suing them?

Clues to assets can be collected from four aspects: the receipt accounts recorded in contracts and reconciliations, the real estate and vehicles disclosed on the other party's official website and in promotional materials, the warehouse and equipment information obtained from historical transactions, and the litigation and mortgage records available through public channels. Preservation measures can be applied for to seize bank accounts, real estate, accounts receivable, etc., usually requiring the provision of guarantees. The preservation guarantee fee and preservation costs should be included in the cost budget. Timing is crucial: completing pre-litigation preservation before filing a lawsuit or applying for it simultaneously with filing a lawsuit can freeze the assets before the other party notices, significantly improving the mediation rate and enforcement completion rate. Specific solutions are recommended to be designed by lawyers.

Q5: What should I do if the other party still refuses to pay even after winning the lawsuit?

Apply for enforcement in a timely manner, and the court can inquire into and freeze or transfer their bank deposits and online payment accounts, seize and auction off real estate and vehicles, and add them to the list of dishonest individuals and restrict their high-consumption activities. If enforcement is unsuccessful, the court can apply to terminate the current enforcement procedure and resume enforcement after discovering clues to the debtor's assets. If the debtor is a company, the court can, under certain conditions, apply to add the shareholders who have not fully paid their subscribed capital, the shareholders of one-person companies, or the liable shareholders who have been deregistered without going through the legal liquidation process. In the long run, the enforcement records of judgments should be used in commercial credit decision-making to avoid continuing transactions with dishonest individuals and prevent the generation of new bad debts.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Business and commercial legal services·Beijing Henglu Law Firm