Legal Question in Credit and Debt Law in Georgia

You have run your business is a grossly negligent way. Before you worry about the charges (no properly run business could have gone more than a month or two without noticing), hire an accountant and have him set up your books properly. With books that sloppy, you need to fear things like IRS audits far more than the lost charges.

You run a very big risk in trying to collect. Can you even find the people? If you do, will they pay or bad mouth you and hurt your future business? And how do you know that some have not since filed bankruptcy where your contact may be improper.

If the amounts are small, eat the losses. If they are large, see a lawyer about drafting a letter in a way that covers possible issues such as bankruptcy. Be aware that you will probably lose many of those 20 people as future customers. You probably will collect some but not all of the money. Do NOT do this with phone calls, and do not do it with a letter you write. Get a lawyer to carefully word your letter.

But mainly, get a CPA and do proper bookkeeping.

Your question s to how far back you can go would be directed at the statute of limitations. In Georgia, it is either 4 or 6 years. This case sounds like it would be governed by the Uniform Commercial Code (UCC). Under the Georgia version of the UCC, the statute is 4 years. See � 11-2-725. Statute of limitations in contracts for sale

(1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it.

To the extent a longer statute would apply, then it is six years for a written contract. See

� 9-3-24. Actions on simple written contracts; exceptions

All actions upon simple contracts in writing shall be brought within six years after the same become due and payable. However, this Code section shall not apply to actions for the breach of contracts for the sale of goods under Article 2 of Title 11 or to negotiable instruments under Article 3 of Title 11.

Attorney Ashman makes a good suggestion that you should consult with an attorney first where you can further discuss this situation in more detail. You may also want to consult a CPA to the extent you need one.