Commercial Debt Collection in Delaware

The statute of limitations determines how long a creditor has to pursue legal action for an unpaid debt. In Delaware, the following statutes apply:

• Written Contracts – 3 years
• Oral Agreements – 3 years
• Promissory Notes – 6 years
• Open Accounts (e.g., business lines of credit, invoices) – 4 years

Once the statute of limitations expires, creditors can no longer take legal action to collect a debt. Acting quickly is crucial to protecting your financial interests.

While Delaware follows federal debt collection laws, there are specific state-level regulations that govern commercial collections:

• No Special Licensing Required – Unlike some states, Delaware does not require debt collection agencies to obtain a state license, though compliance with the Fair Debt Collection Practices Act (FDCPA) is mandatory.
• Pre-Judgment Remedies – Creditors may seek writs of attachment or other pre-judgment remedies to secure assets before obtaining a final judgment.
• Post-Judgment Enforcement – A Delaware judgment remains enforceable for 10 years and can be renewed, allowing creditors to pursue wage garnishments, liens, and bank levies if necessary.
• Interest on Outstanding Debt – Delaware law allows creditors to charge interest on unpaid commercial debts if outlined in a contract. Otherwise, the legal maximum is 5% over the Federal Reserve discount rate.

While Delaware’s debt collection laws largely align with federal regulations, the state’s business-friendly legal environment provides advantages for creditors, including:

• Efficient Business Court System – Delaware’s Chancery Court is renowned for resolving corporate disputes quickly and fairly, benefiting creditors dealing with business-to-business (B2B) debt.
• Stronger Corporate Protections – Many businesses incorporate in Delaware due to its favorable corporate laws, but this can also complicate collections. Our team specializes in navigating these complexities.
• Flexible Contract Enforcement – Delaware law upholds contractual agreements and allows businesses to establish customized payment terms, making it easier to enforce debts in court.