Montana Statute of Limitations on Business Debt: What Creditors Owed by a Billings Company Need to Know

A creditor owed by a Montana company has six years to sue on a contract founded on an instrument in writing, five years on an account or an unwritten contract, four years on a sale of goods, and ten years on a judgment. The period most trade creditors live under is the five years, because most receivables are a running account of invoices, not a signed instrument.

Montana is unusual in one respect: the gap between signed and unsigned paper is a single year, the narrowest in the West. Know too that older summaries, including charts still circulating in 2024, show eight years for a written contract. The current section says six. Below is what the Montana Code Annotated says today, what moves the clock, and what to do with a Billings account that has gone quiet. Laws vary by state and this is general information, not legal advice.

Key takeaways

• MCA 27-2-202(1) gives six years to an action on any contract, covenant, obligation or liability founded on an instrument in writing. Section 27-2-202(2) gives five years to one on a contract, account or promise not founded on a writing, which is where most trade receivables land.
• Section 27-2-202(3) gives three years to an obligation or liability, other than a contract, account or promise, not founded on a writing. An unpaid invoice is an account, so the three years is not your number.
• Under Section 27-2-409 an acknowledgment in a writing signed by the debtor, or any part payment of principal or interest, causes the statute of limitations to begin running anew. The section is silent on an account the statute has already run on.
• A contract for the sale of goods gets four years under Section 30-2-725, and the original agreement can cut that to as little as one year but cannot extend it. The claim accrues at the breach whether or not the seller knew of it.
• A Montana judgment can be enforced for ten years under Section 27-2-201 and 25-13-101, and a docketed judgment is a lien on the debtor's real property in the county for ten years under Section 25-9-301.
• If you have a signed agreement that allows for collection costs or collection agency fees, those charges may be included in the amount sought during collection. If legal action becomes necessary, recoverable fees and costs are determined under applicable Montana law and are ultimately subject to the court.

How long do you have to sue on a business debt in Montana?

Direct answer

Six years on a contract, covenant, obligation or liability founded on an instrument in writing under MCA 27-2-202(1). Five years on a contract, account or promise not founded on a writing under 27-2-202(2). Four years on a contract for the sale of goods under 30-2-725. Ten years on a judgment of a court of record under 27-2-201.

Montana draws the line between written and unwritten obligations, the line Idaho, Utah and New Mexico draw and Oregon and Washington do not. Section 27-2-202(1): any contract, covenant, obligation or liability founded on an instrument in writing, six years. Section 27-2-202(2): a contract, account or promise not founded on a writing, five. A signed credit agreement or a promissory note sits in the first group. A stack of invoices nobody signed sits in the second.

Read the section itself before you rely on any chart, including the one on our own statute of limitations by state page, which carries the figures Sven compiled in 2024. The history line under 27-2-202 shows amendments by the 2023 and 2025 Legislatures, and the eight year figure older summaries show for a written instrument is gone from the current text. For a Billings account that was already old when the section changed, ask a Montana attorney which version governs it. Either way, plan every trade account around five years and treat the sixth as something your signed paperwork may earn you.

Is an unsigned Montana account five years or three?

Direct answer

Five. Section 27-2-202(2) gives five years to an action on a contract, account or promise not founded on an instrument in writing, and an open account of invoices is an account. The three year period in 27-2-202(3) is for an obligation or liability that is not a contract, account or promise.

This question comes up because the two subsections sit next to each other and both say "not founded on an instrument in writing." The difference is the noun. Subsection (2) names a contract, an account and a promise; subsection (3) covers the obligations and liabilities that arise without one behind them. A customer who ordered product, received it and was invoiced for it owes on an account and on a contract, written or not. That is five years.

Where the three years can bite is on a claim that is not really a contract claim: money paid by mistake, or goods a company received but never ordered or agreed to pay for. If your lawyer says the better theory is not contract, the shorter clock may follow. For the ordinary unpaid invoice from a customer in Billings, Laurel or Lockwood, plan on five.

Does a signed credit application give a Billings account six years or five?

Direct answer

In Montana the signature buys one year, not two. A contract founded on an instrument in writing gets six years under 27-2-202(1); an account or unwritten contract gets five under 27-2-202(2). Whether a particular credit application is the instrument the obligation is founded on is a question for a Montana attorney.

Credit managers ask me this in every state, and Montana is where the answer matters least. Utah and New Mexico give a signed instrument six years against four for an open account. Idaho gives five against four. Montana gives six against five. The signature is still worth getting, because the paragraph saying the customer agrees to pay on the stated terms is what turns a form into a contract, and because the signed application is where your interest, service charge and venue terms live. It is just not worth much limitation time here.

So in Montana you do not get to relax because the customer signed. A five year account and a six year account age at almost the same rate, and in both the collectability of the money is gone long before the statute is. The paperwork protects your claim. It does not protect your cash.

When does the Montana clock start on an unpaid invoice?

Direct answer

When the claim accrues, which under 27-2-102 means when every element of the claim exists and the right to sue is complete. For an invoice that is the day it goes unpaid past its due date. Lack of knowledge does not postpone the start, and the concealment rule covers injury to person or property, not a trade account.

Section 27-2-102 is written against the creditor who waits: the period begins when the claim accrues, and lack of knowledge does not postpone it. The discovery rule in subsection (3) covers a concealed injury to person or property, which is not a description of an invoice the customer ignored.

Montana has no statute that measures an open account from its last item, the way New Mexico's 37-1-6 does. The conservative reading, and the one I plan accounts around, is that each invoice ages on its own clock from its due date, so the oldest invoice on a Billings account falls off first. Whether a ledger of reciprocal charges and credits is treated as one running account is a question for a Montana attorney with the statement in hand. A finance charge you post on your own side is not activity by the customer either way.

Does a sale of goods get a different period in Montana?

Direct answer

Yes. Section 30-2-725 of Montana's Uniform Commercial Code requires an action for breach of any contract for sale to be commenced within four years after it accrued. The original agreement may reduce that period to not less than one year but may not extend it, and the claim accrues at the breach regardless of the seller's knowledge.

Montana's Title 30, Chapter 2 is Article 2 of the Uniform Commercial Code, and it governs the sale of goods, which covers most of the distributors, manufacturers, building material dealers and oilfield suppliers reading this. Where 27-2-202 would give a signed supply agreement six years, 30-2-725 gives a contract for sale four, so product sold on a signed master agreement to a Billings customer is on the four year clock.

Three things in the section deserve attention. The period can be shortened by agreement, down to one year, and the original agreement controls, so a master supply agreement signed years ago can do exactly that. It cannot be extended, so a clause in your own terms claiming six years does nothing. And the claim accrues at the breach regardless of the seller's knowledge, which for a nonpayment means the due date. Subsection (4) leaves the tolling rules alone, so 27-2-409 and 27-2-402 still apply.

Does a payment or a signed acknowledgment restart the Montana clock?

Direct answer

Yes. Under 27-2-409 an acknowledgment or the part payment of a debt is sufficient evidence to cause the statute of limitations to begin running anew. The acknowledgment must be in a writing signed by the party to be charged. Part payment is any payment of principal or interest, and needs no writing at all.

Section 27-2-409 is short and generous on the payment side. Any payment of principal or interest is part payment, and it starts the period running anew with no writing required. A $500 check against a $40,000 balance restarts five years on the whole balance, so take the small payment a customer offers to buy time, document what it was for and how it was applied, and keep working the account. The payment helps you. The time does not.

The acknowledgment side is stricter. It must be contained in some writing signed by the party to be charged. A controller's email confirming the balance is a writing, and whether a typed name on it is a signature for this purpose is a question for a Montana attorney, so get the email anyway. A phone call promising a check restarts nothing.

What the section does not say matters as much. It speaks of causing the statute to begin running anew, and it is silent on whether a payment or acknowledgment made after the period has already expired brings the claim back. Washington says nothing does since 2019. New Mexico says a partial payment revives an expired claim. Montana's text does not answer the question, so a creditor holding an expired Montana account should ask counsel before treating a late payment as a second chance.

What if the customer left Montana or the contract names another state's law?

Direct answer

Section 27-2-402 stops the clock while a debtor who cannot be served is out of the state. Under the Uniform Conflict of Laws Limitations Act, 27-2-503, a claim substantively based on another state's law carries that state's limitation period, with its accrual and tolling rules, unless a Montana court finds the result unfair under 27-2-505.

Montana's absence rule is narrower than it reads. Section 27-2-402 excludes the time a defendant is out of the state only where the person cannot be served with process, and a Montana corporation with a registered agent on file can be served while its owner winters in Arizona. Treat tolling as a question for a Montana attorney, never as time you have.

The out of state question is where Montana is most interesting, and it runs both ways. Montana adopted the Uniform Conflict of Laws Limitations Act in 1991, the same act Oregon uses. Under 27-2-503, if a claim is substantively based on the law of one other state, that state's limitation period applies in a Montana court, and under 27-2-504 so do that state's accrual and tolling rules. Montana's own periods apply to everything else. So a creditor whose signed terms choose Colorado law, suing a Billings customer in Yellowstone County, may be handed Colorado's three year contract period rather than Montana's six. The escape hatch is 27-2-505: if the other state's period is substantially different and has not afforded a fair opportunity to sue, Montana's period applies. Where more than one state could hear the claim, ask counsel which forum and which clock before anyone files.

How long can a Montana judgment be enforced?

Direct answer

Ten years. Section 27-2-201 allows an action on a judgment of a court of record within ten years, and 25-13-101 lets the judgment creditor have a writ of execution issued within that same period. Under 25-9-301 a docketed judgment is a lien on the debtor's real property in the county for ten years.

Ten years is the longest clock in the state for a commercial creditor, and it comes with a lien. Section 25-9-301 makes a docketed judgment a lien on all of the debtor's non-exempt real property in the county, owned then or acquired later, for ten years unless the judgment is satisfied first. A creditor with a judgment against a Billings company that owns its shop or yard should see that it is docketed in Yellowstone County and in any other county where the company holds land.

Execution runs on the same period: 25-13-101 lets the judgment creditor have a writ issued at any time within the ten years 27-2-201 prescribes. Most of the claims we handle settle long before anyone needs a writ, but the ten years is what gives a judgment its leverage.

Can you take a business debt to small claims court in Billings?

Direct answer

Yes, within limits. Montana's small claims court, held in the justice court, hears claims for money up to $7,000 under 25-35-502 when the defendant can be served in the county. A corporation may appear through an officer or employee under 25-35-505. Contract claims up to $15,000 go to justice court under 3-10-301; larger ones to district court.

Montana gives a commercial creditor three doors. The small claims court under Title 25, Chapter 35 takes actions for the recovery of money up to $7,000, exclusive of costs, only where the defendant can be served within the county where the action is filed, so a Billings creditor suing a Billings customer files in the Yellowstone County Justice Court. Section 25-35-505 lets a corporation appear through a director, officer or employee, keeps lawyers out unless every party has one, bars assigned claims and caps a party at ten small claims filings in a calendar year, so an agency cannot file there for you and a high volume creditor cannot use it as a collections desk.

Above $7,000, the justice court has jurisdiction in actions on contract for the recovery of money up to $15,000 under 3-10-301. Above that, the case belongs in district court, which for Yellowstone County is the Thirteenth Judicial District under 3-5-101, where the business will generally need counsel and a customer with a story about the goods will tell it to the judge.

Once a claim moves toward court the interest question gets decided by the contract and by the interest statutes. Section 31-1-106 sets interest at ten percent a year after money becomes due on an instrument in writing, an account stated or a settled balance where no written contract fixes a different rate; 31-1-107 lets the parties agree in writing to a rate up to the greater of fifteen percent or six points over the published bank prime rate; and 25-9-205 puts interest on a judgment at prime plus three points, or at the contract rate where one is specified. For most accounts in the range we handle, the right first step is still a professional collection effort, which costs nothing unless it collects and keeps the courthouse in reserve.

Does a collection agency need a Montana license?

Direct answer

No. Montana has no collection agency licensing act. We checked every title of the 2025 Montana Code Annotated for one this week and there is none, which puts Montana among the states that do not license or register agencies. That makes the agency's own certifications and bond the thing to check before you place an account.

Most of the West requires something. Idaho licenses agencies under its Collection Agency Act, Washington under RCW 19.16, Oregon registers them with its Department of Consumer and Business Services, and New Mexico licenses them through its Financial Institutions Division. Montana does not; the Montana Code Annotated has no chapter for it. Utah is the other no-registration state in our lane.

That is why it is important to use a certified commercial collection agency. Sven works with C2C Resources, which is certified by the Commercial Law League of America, endorsed by the International Association of Commercial Collectors, carries a $500,000 surety bond, and holds collection licenses in the states that require them. C2C has collected more than $1 billion for 35,000+ clients since 2002. A suspiciously high published rate usually means the agency is making the number up. Our where we collect page lists the states we work, Montana included.

What should a creditor do with a Billings account right now?

Direct answer

Date every unpaid invoice from its due date, because Montana measures from accrual and has no last item statute. Sort the paperwork into signed and unsigned, which decides six years or five. Note the last payment and any signed acknowledgment, since either restarts the period. Read both sides' terms for a goods clause. Then place it early.

Here is the order I would work a Montana account in. First, the invoices: list every open one with its due date, because under 27-2-102 each accrued the day it went unpaid, and the oldest falls off first. Second, the documents: sort the credit application, purchase orders and invoices into what the customer signed and what it did not; that sort is the difference between six years and five, and it is where your interest and service charge terms live.

Third, the restart evidence: the date and amount of the last payment, and any signed writing in which the customer acknowledged the balance, because under 27-2-409 either one starts the period running anew. Put those in the file now.

Fourth, the terms. Read your own paper for a goods clause that shortened the four years under 30-2-725, and both sides' paper for a choice of law clause, because under 27-2-503 that clause can import another state's clock into a Montana courtroom. On a construction or oilfield account the lien deadlines run far shorter than any of this; they are in the western states lien guide and the oilfield collections guide.

Fifth, decide. Montana's five and six years are comfortable numbers, and that comfort is how Billings accounts get worked too slowly. A two year old account has lost most of its leverage whatever the statute still allows. The neighboring states are in the Idaho, Washington, Oregon, Utah, Colorado and New Mexico guides, and the full statute of limitations by state table covers a customer anywhere else.

If a Montana company owes you money, the fastest way to find out whether the account qualifies for recovery is a short call. We work commercial claims from $1,000 to hundreds of thousands of dollars, under 120 days past due, on contingency.

Book a Call with Sven

Prefer the phone? 855-927-0500. Or schedule a free consultation online. You can see how the process works on our commercial debt collection services page, and the resources page has credit application and collection letter templates for the paperwork side of this.

Frequently asked questions

Is the Montana statute of limitations different for a business debt than for a consumer debt?

MCA 27-2-202 applies to contracts and accounts generally, business or consumer. What differs on a commercial account is the paperwork: a signed credit agreement, purchase orders and a running account of invoices decide whether the claim is founded on an instrument in writing, which gets six years, or on an account or unwritten contract, which gets five, and whether the sale of goods rule applies instead. We handle commercial (B2B) claims only, so this article is written for the creditor side of a business account.

Our Billings customer never signed anything. How long do we have in Montana?

Five years. Section 27-2-202(2) gives five years to an action on a contract, account or promise not founded on an instrument in writing, which is where an oral agreement and an account built on invoices land. If what you sold was goods, Section 30-2-725 gives four years from the breach, and the customer's own terms may have cut that to as little as one year. Count from the due date of each unpaid invoice unless a Montana attorney tells you the account is measured differently.

The customer sent a small payment last month. Did that restart the Montana clock?

Yes, if the period was still running. Under Section 27-2-409 the part payment of a debt is sufficient evidence to cause the statute of limitations to begin running anew, and part payment is any payment of principal or interest, with no writing required. A written acknowledgment works the same way but must be signed by the party to be charged. The section does not say whether a payment revives a claim the statute has already run on, so treat an expired account as a question for counsel, not as revived.

Can we charge interest on a past due Montana invoice if our terms never mention it?

Montana sets a legal rate that applies after money becomes due on an instrument in writing, an account stated or a settled balance where no written contract fixes a different rate, so a charge at that rate is possible on an invoice that was due on receipt. Where you extended credit terms such as net 30, any service charge or interest belongs in the written credit agreement the customer signed. A charge that appears for the first time on a past due statement is the first thing a customer disputes.

What size of claim can you help with?

We work commercial claims from $1,000 to hundreds of thousands of dollars, under 120 days past due, on contingency, so there is no fee unless we collect. Commercial (B2B) collections only. We do not collect consumer debt. That covers accounts owed by companies in Billings, Laurel, Bozeman, Missoula, Great Falls, Helena, Butte, Kalispell, Miles City and the rest of Montana. Yes, we collect internationally. Talk to us about your specific account.

Sources: Montana Code Annotated 2025, Montana Legislature, mca.legmt.gov: 27-2-202, 27-2-201, 27-2-102, 27-2-409, 27-2-402, 27-2-503, 27-2-504, 27-2-505, 30-2-725, 25-35-502, 25-35-505, 3-10-301, 3-5-101, 25-9-301, 25-13-101, 25-9-205, 31-1-106, 31-1-107 and 1-2-201, all read November 2026. Laws vary by state and change over time. This article is general information from a commercial collections professional, not legal advice or a substitute for a Montana attorney. Written by Sven Nelson, The Guy That Gets You Paid.