B2B Receivables · Account Stated · 9% Interest
Your business sent the invoice. Now make it collectible.
New York law gives unpaid businesses more leverage than most owners use.
An unpaid invoice is not a awkward conversation; it is a legal claim earning 9% statutory interest. New York recognizes account stated claims, shifts leverage sharply once an attorney is involved, and offers fast small-dollar courts when needed. Here is the escalation ladder for a New York small business that is done waiting.
Provided through DemandLetterNY.com, a service of Hochman Law PC.
The claims behind an unpaid invoice.
BREACH OF CONTRACT · ACCOUNT STATED · CPLR 5004
Most B2B collection matters rest on two claims. Breach of contract is the obvious one: goods delivered or services rendered, payment refused. Account stated is the one owners forget: under New York common law, a customer who receives invoices and keeps them without objecting within a reasonable time can be held to have agreed the balance is owed. Months of silence after your invoices can become evidence for you. On top of either claim, CPLR 5004 sets prejudgment interest at 9% per year for these commercial claims, running while the debtor stalls.
Step one: tighten the file.
- Assemble the contract or PO, delivery records, each invoice, and statements of account.
- Confirm the exact legal name of the debtor entity; you collect from "Acme Renovations LLC," not "Tony."
- Note every partial payment and promise; partial payments acknowledge the debt.
- Send a final statement of account by email and mail, creating a clean account stated record.
Step two: the attorney demand letter.
The gap between an owner's dunning email and an attorney's demand letter is the gap between accounts payable and legal risk. The letter states the claims, computes principal plus 9% interest, sets a deadline, and signals that litigation is priced and ready. Many debtors who ignored six emails pay within days of one letter, because their own lawyer tells them the defense costs more than the debt. Hochman Law PC sends these for a flat fee through DemandLetterNY.
Step three: pick the right court.
If the letter does not resolve it, the size of the claim picks the forum. Small claims and commercial claims parts handle modest sums cheaply and quickly; larger receivables belong in a plenary action where interest and, if your contract provides, attorney's fees are on the table. The comparison, including the dollar limits by court, is here: demand letter vs. small claims in New York.
Special cases worth knowing.
- You are owed as a freelancer, not an entity with employees: the Freelance Isn't Free Act may apply and can add double damages and fee-shifting.
- Your customer is a general contractor who was paid for your work: construction trust-fund concepts may give you added leverage; raise it with the attorney.
- The debtor is dissolving or judgment-proof: speed matters more than perfection; a fast letter beats a slow lawsuit.
Interest is your quiet ally.
At 9% per year, a $20,000 receivable accrues $150 a month while the debtor "circles back." A demand letter that states the accruing figure reframes delay as an expense. Debtors respond to running meters.
A flat-fee demand letter drafted and signed by a New York attorney often resolves it without a lawsuit. Start online at DemandLetterNY.com, a service of Hochman Law PC, or learn more about flat-fee demand letters.
Questions people ask us.
What is an account stated claim?
A New York common-law claim that arises when a debtor receives and retains invoices without objecting within a reasonable time. The silence itself can establish that the balance is owed, which simplifies proof considerably.
What interest rate applies to unpaid invoices in New York?
CPLR 5004 sets statutory interest at 9% per year for most commercial claims, typically running from when payment was due. (A lower 2% rate applies only to certain consumer-debt judgments against individuals, not business receivables.)
Can my LLC sue in small claims court?
In the regular small claims parts only individuals can sue, but corporations, partnerships, and associations can use the commercial claims part, subject to its dollar limit. Details: demand letter vs. small claims.
Is it worth a lawyer for a $3,000 invoice?
At hourly rates, often not, which is the point of a flat-fee demand letter: a fixed, known cost for attorney leverage. Many small receivables resolve at the letter stage precisely because litigation makes no economic sense for either side.
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Receivables are claims. Treat them like it.
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