Invoice limitation on 31 December 2026: what becomes time-barred and what to do before New Year

Which invoices become time-barred on 31 December 2026?

In Germany, unpaid invoices usually become time-barred after three years. The period does not start on the invoice date, though. It starts at the end of the year in which the claim arose and you knew about the claim and the debtor. With your own invoices you practically always know both.

A claim arises as soon as you can demand payment, which means when it falls due. That gives you this year's key date: everything that fell due in 2023 and is still unpaid becomes time-barred at the end of 31 December 2026. From 1 January 2027 the customer may refuse payment permanently. The claim still exists, but a court will no longer award it to you once the customer invokes the limitation period.

This is how to classify typical borderline cases:

• Delivery in March 2023, payment term 30 days: due in April 2023, time-barred at the end of 31 December 2026.
• Service on 20 December 2023, agreed payment term 30 days: due in January 2024, time-barred only at the end of 31 December 2027.
• Construction work accepted in December 2023, final invoice in February 2024: under a construction contract the price only falls due after acceptance and the final invoice. Limitation at the end of 31 December 2027.

Pull all open items that fell due in 2023 from your accounts today. That is your working list until New Year's Eve. The basics on periods and special cases are explained in our guide to limitation periods for claims in Germany.

What does not stop the limitation period?

This is the most expensive mistake in receivables management. These steps do not stop the clock:

• payment reminders, including the third one and including registered mail
• sending the invoice again or an invoice copy with a new date
• reminder emails and phone calls the customer does not respond to
• payment demands from a collection agency or a law firm
• handing the claim over to a collection agency on its own

A reminder puts the customer in default and starts late-payment interest. It has no effect on limitation. The same applies to a collection letter: it increases the pressure but does not suspend the period. As a collection agency, we say this openly. Anyone who only sends reminders in December will start January without an enforceable claim.

So mark one of the steps from the next section against every item on your list.

What suspends the limitation period or restarts it?

The German Civil Code (BGB) knows two routes. Suspension (Hemmung) stops the clock, and the suspended time is added to the period. A restart (Neubeginn) resets the clock: from the day after the event, a full three years run again, to the day and not to the end of the year.

The acknowledgement is the strongest tool, because it restarts a full three years. It does not need to be formal. Any conduct of the customer that clearly shows they know and accept the debt is enough: a part payment referring to the invoice, a signed balance confirmation, an instalment agreement.

With a court payment order, the law links suspension to service. If the order is served promptly after the application, however, the day the application reached the court already counts. Delays on your side, such as a wrong address or an unanswered query from the court, put this backdating at risk.

Ask cooperative customers for a written confirmation first. For everyone else, plan the court payment order.

Your plan for November and December

Count backwards from 31 December 2026. That day is a Thursday, and the holidays come before it. Build in a buffer, because the payment-order courts object to incomplete applications and every correction takes time.

Put these dates in your calendar today and assign every item to a responsible person.

Which documents do you need now?

In December there is no time left to search for records. Create a file for every item from 2023 before you write to customers or hand over cases. You need this information for a handover and for the court payment order:

• the customer's full name or company name with legal form, for businesses ideally from the commercial register
• a current address for service, not a PO box
• the invoice with number, date and due date, plus the order or contract
• proof of performance such as a delivery note, acceptance record or timesheet
• all payments and credit notes relating to this invoice
• reminders and correspondence, above all every message in which the customer confirms or disputes the claim

Pay particular attention to two points. If the customer has reported defects or disputed the invoice, clarify that first, because no reputable collection agency takes on disputed claims. And if the customer paid something or confirmed the claim in writing at some point, note the date: it can push the key date back, as the following example shows.

Example: three invoices, three key dates

Example: in mid-November, a wholesaler has three open items with different customers.

• Invoice A for 2,400 euros, due on 15 April 2023. No contact, no payment. Time-barred at the end of 31 December 2026. Every day counts here.
• Invoice B for 1,150 euros, delivery on 18 December 2023, due on 17 January 2024. Time-barred only at the end of 31 December 2027. No reason to rush, but no reason to wait another year either.
• Invoice C for 3,000 euros, due in June 2023. On 12 May 2025 the customer paid 500 euros on exactly this invoice. That restarted the limitation period. The remaining 2,500 euros only become time-barred at the end of 12 May 2028.

The wholesaler therefore concentrates on invoice A. The customer has ignored every reminder, so the payment order is applied for by 11 December. The wholesaler hands over invoice B at the same time, because waiting another year will not improve the chances. For invoice C, it agrees a written instalment plan for the remaining amount with the customer.

Apply for the payment order yourself or hand it over?

You can apply for the court payment order yourself via the online-mahnantrag.de portal, either electronically with an online ID card or as a printed barcode application sent by post. Shortly before New Year’s Eve the electronic route is safer, because an application sent by post only counts once it reaches the court. You need the customer's exact name, an address for service, the invoice number and date, the open amount and the interest. The court does not check whether the claim exists, only whether the application is complete. The individual steps are shown in our article on how to apply for a payment order online, and you can see where it fits in the procedure under German payment orders. The court fee depends on the amount; the court-fee calculator gives you a first estimate.

If the customer files an objection, the limitation period initially remains suspended. If nobody pursues the proceedings, however, the suspension ends six months after the last procedural step. Anyone who does nothing after an objection loses the protection again. So decide immediately after an objection whether you will pursue the claim in contested proceedings.

When is a handover before the turn of the year worthwhile?

Hand over claims that are due and undisputed and where the customer does not respond to your reminders. A collection agency then takes over the out-of-court work. If payment still does not arrive, the court payment procedure follows. A collection mandate on its own does not suspend limitation, though. That is why timing decides for items from 2023.

At incaseof.law you hand over the claim online in the client portal: register, enter the debtor, amount and due date, upload the invoice and supporting documents. The case team decides on the reminder stages. Court proceedings such as a court payment order are only initiated after your approval; the case team clarifies the procedural route and any required representation with you case by case. There are no automatic court filings. For items from 2023 this means: hand them over by the end of November and clarify the court route in good time. Point out the imminent limitation expressly when you hand the claim over. You monitor limitation yourself; a collection mandate does not suspend it. If December is already well advanced, it is better to apply for the payment order yourself.

In regular out-of-court collection there are no costs from incaseof.law, even if the debtor does not pay, and no success fee on your principal claim. Court fees and, in Austria, MANZ transmission fees only arise once you approve court proceedings. 100 % of the principal claim goes to you. Recovery and duration are not guaranteed. You can see how the handover works under submit a claim.

Does the year-end rule also apply in Austria?

No. In Austria, claims for goods and services also become time-barred after three years, but there the period starts when the claim falls due and not at the end of the year. Every invoice has its own key date. A reminder does not interrupt the period there either. What works is an acknowledgement by the debtor or a lawsuit that is properly pursued.

If you have customers in Austria, check those items separately by due date. The year-end checklist for Austria helps you do that.