What Are Open Accounts?
About Open Accounts
- any account where a part or all of a balance is past due; and
- it does not matter if the balance is from one transaction or more than one; and
- it does not matter if the parties expected future transactions at the time of transacting.
Common examples of open accounts: credit card accounts, bills for repair work, doctor bills, and attorney's bills. Examples of debts that are NOT open accounts are promissory notes or mortgages. Most contracts are not open accounts.
Under Louisiana law, in a lawsuit to collect money based on an open account, the creditor can get attorney fees and all court costs, unless the amount the court awards is less than they requested. Attorney fees of 25% of the total debt owed are common unless seriously challenged.
The time period to sue on an open account is three (3) years from the date of the last charge, purchase, payment, or credit entry on the account. That this three (3) year period has passed does not stop a debt collector from attempting to collect or suing. But it will give you a solid legal defense to the collection if you present the defense before a judgment is entered.