Limitation of debt. How long does it take for the debt to be written off?
Is there such a thing as limitation of debt? Is taking a loan and not paying it back after some time the debt will be barred? This question is asked by many people, not only those who have financial problems and are not able to pay their liabilities, but also those who plan to take out a loan, but consider all possible life adventures.
It may happen that we will not be able to pay off our debt. The bank will take over our apartment and decide that we still owe him money. It will involve a bailiff to collect the debt, and we will then leave the country and be afraid to return to it for fear of prosecuting debt collection companies or bailiffs.
Remember that the creditor will not give up so easily. He will try to reach you through friends, family, work or friends. Often, debt is sold to debt collection companies whose methods are already various. They often rely on bullying and frequent calling at various times to tire us out and intimidate us in some way.
There are many types of financial liabilities, but it's easiest to divide it into short-term debts and long-term liabilities.
Can the debt be time-barred?
According to the Civil Code, there is such a thing as limitation of debt. After some time specified in the Civil Code, we can simply not pay off the debt. It amounts to 10 years for all property claims. For entrepreneurs, 3 years.
However, it may vary depending on the form of debt. Eg. mandate the limitation period is 1 year. This means that if we do not pay the fine, and there is no execution by the office for a year, we will not pay the fine again. If you run a business and someone will not pay you an invoice, and you fail to collect the money, the debt expires after 2 years.
It may be important for the ordinary consumer limitation of telecommunications services and overdraft. It is 2 years. Rent debt expires after 3 years, same credit card debt.
When is the debt due to non-repayment expired?
There are two issues to remember here. First of all, banks are entrepreneurs, therefore a 3-year period applies. But only from the due date. The loan is spread over installments, so each unpaid installment is a different limitation period. Usually, however, if the installments are not repaid, the bank will terminate your contract. Then he will call us to repay the whole loan amount within a specified period and from this moment the period of limitation of 3 years will expire.
However, there is another one, but surely the bank will not leave this problem without intervention and will take steps to recover the debt. He will go to court with a civil suit, then to the bailiff for enforcement. Each of these activities again postpones the limitation period. When the execution of the loan is interrupted, the trial in court will end and the bailiff will stop the execution of the debt, the time will start again and we wait 3 years for its limitation.
The limitation period is also stopped when we recognize the debt we have to pay. Even a conversation with the bank, in which we ask you to write off the debt, can be treated as recognizing a debt.
On Monday, July 9, 2018, amendments to civil law came into force. With her the basic limitation period for claims has been reduced from 10 to 6 years. In the case of claims related to running a business and regarding periodic benefits, e.g. rent and lease, this period is unchanged, i.e. three years.
The method of calculating the expiry of the limitation period has also changed. The limitation period ends on the last day of the calendar year. This is to make things easier for creditors who will not have to use the calculations now, they just have time to the end of the year. However, this does not apply to debts with limitation periods of less than two years.
Another change concerns court enforcement. Earlier, the bank had to transfer the sum immediately, we could not defend ourselves because of it. Now the money will not immediately go to the bailiff's account, we have 7 days in which we can take action and clarify the matter.