Advice from Nashville's Financial Guru Dave Ramsey
Dave Says
By Dave Ramsey
Author of Financial Peace and The Total Money Makeover
7/12/2004
How long do I owe money from client's overpayment?
Dear Dave,
I used to do business with a major city in the Southeast. There was a lot of red tape just to get the business started - running invoices back and forth and things like that. Every now and then they would show up and overpay me or underpay me. This went on for about a year and a half and I've since stopped doing business with the city. In fact, I've stopped doing business all together.
Is there a time limit on settling the account with them? For instance, I once wrote them a check for an overpayment. A year later they still have not cashed that check.
Nathan in Louisville, KY
Dear Nathan,
The first thing I'd do is notify the city that if they don't cash the check immediately it's probably not going to be any good because you're about to close the account. Let them know that if they need another check, if they've lost the original, that's fine, but you need those people to get their act together. Technically, you wrote them a check because you owed them money, so morally you should pay them. But it's aggravating that they haven't cashed the check in a year. However, if you do close the account you should probably make sure you have that money available to give them since you owe it.
Could they come back at you for the money later? Sure. You owe it. Is there a statute of limitations or time limit on the debt? That depends on the state in which the transaction occurred. You'd really have to consult an attorney, but my guess is the check isn't big enough to warrant going to war over. Instead I'd try to force their hand by telling them to cash the check and if they don't, I'd close the account.
-Dave
More About Dave
Dave Says Articles
Dave Ramsey History
Dave Ramsey.com
