Limitation of consolidated debt – can repayment be avoided by counting on a loan being prescribed?

22 Feb

 

What is the aging of consolidated debt?

In accordance with the applicable provisions of the Civil Code, each debt incurred has its expiration date. After this period, the obligation does not disappear, but it becomes practically impossible to make a payment from the debtor. The debt may be time-barred if the creditor – a natural person, bank or loan company, did not ask for his return, did not bring the case to court, and thus did not stop the limitation period (Article 123 § 1 of the Civil Code).

What consolidated debts may be time-barred and when the time is up to the statute of limitations

Limitation regulated by art. 118 of the Civil Code may apply to any debt, ranging from a parking ticket, through arrears in payment of rent, to long-term debts. This provision also applies to loans from individuals, financial enterprises, or unpaid bank loans. It is essential that the company or institution does not enforce payment in a different way than using standard debt collection activities. Time should be counted from the first day the creditor can begin to demand repayment of the debt. Most often, this is the date immediately after the end of the loan or loan agreement.

How much do you have to wait for the statute of limitations?

In the case of a loan or credit agreement, the limitation period is 3 years because the contracting party is a financial institution or an economic entity. It is good to interpret the rules in force and be aware that if the creditor transfers the case to the debt collection agency, it does not interrupt the limitation period. His suspension only causes the case to be brought to court or a bailiff is requested to initiate execution. The situation is slightly different in the case of loans from a natural person, because the period of limitation is in this case 10 years, and in accordance with the new regulations, 6 years. Theoretically, this is the time in which the debtor is to improve his financial situation and accumulate funds necessary to cover claims. In practice, matters relating to loans granted in the family or among close friends are rarely referred to court, and many debts are expired.

Limitation of a bank loan and loan

It should be assumed that the prescription of a bank loan will not come to an end, because the bank will quickly refer the case to court. Such cases, however, happen in the case of companies providing quick loans – payday loans. Even after a few years from the cessation of repayment, you can expect a phone call from a debt collection company, which will be interested in recovering the debt. The debtor will not be informed about the statute of limitations. What is more, the debt collector will try to enforce the repayment and may refer the case to court proceedings. However, the law works in favor of the debtor and if there is a limitation period, the court will not require the borrower to settle the claims. However, this does not change the situation of the debtor: he does not have to pay liabilities, but his debt exists, and he is listed in the Credit Information Office and the National Debt Register .

Using additional financing is a simple way to meet your current needs. It is worth lending money with common sense to avoid later unpleasant consequences in the event of repayment. On the other hand, everyone who decides to use the offer of a bank or a loan company should know what is the limitation period and in which situations it applies.

 

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