Limitation of credit – When is the debt time-barred?



Nobody likes to have overdue obligations. Unfortunately, sometimes they accumulate so much that we are not able to pay them back at the same time. It happens that we don’t even remember some of them. Especially when the creditor does not rebuke. When, after a long time, someone contacts us in connection with the repayment of debts that arose a long time ago, it is better to check whether they are expired. Knowing the limitation periods is important, because if we pay even a symbolic amount for an obligation that is already time-barred, unfortunately the limitation will cease to apply. The answer to the question about when the debt expires is not unambiguous, because each commitment is treated differently.

Limitation of debt – what is it and what are the deadlines?

Limitation of debt - what is it and what are the deadlines?

The limitation institution is regulated by the provisions of the Civil Code. In short, this means that each debt has a specific deadline by which you can apply for your money back. When the magic date is exceeded, the debt does not disappear, but the debtor does not have to pay it back. You can not equate the limitation of debts with their cancellation, because both concepts mean something completely different.

It is important that the limitation period does not count from the moment the payment deadline is exceeded, but from the date of the last reminder or letter from the creditor. In addition, each commitment has a different deadline, so we must be careful. The fastest, after a year, tickets and transport contracts expire. After 2 years, for example, claims related to civil law contracts or debits on the bank account expire. The rent, credit card, credit and maintenance are for 3 years and taxes for 5 years.

In what cases is the loan barred?

In what cases is the loan barred?

According to the law, the loan is time-barred after 3 years. It is not important in which institution she was taken, it is important for the lender to grant a loan due to the fact that he runs a business. However, there are situations in which the limitation period is much longer and amounts to 6 years. This happens when the loan is granted by a private individual.

Loan and limitation when we deal with it? The mechanism looks like this. First, the payment deadline must pass. From that day, 3 years count, until the limitation becomes a fact. However, the creditor, in this case the lender, has 3 years to collect the debt. Reminders sent by letter or referral to court interrupt the run. If an enforceability clause is awarded in court, the whole limitation process begins from the beginning. Most often, banks and loan companies look after limitation periods, so don’t count on someone forgetting us.

Is the outstanding loan barred?

Is the outstanding loan barred?

It would seem that it is enough to know the basic limitation periods to know when we can “free” from debts. But it does not always look so simple, an example of which is the limitation period for credit. While in the case of payday loans, fines or other obligations that are repaid on a one-off basis, there is not much trouble, but if you pay something in installments, and this is what happens with loans, you need to know how to approach the calculations. Is the outstanding loan barred?

An installment repayment schedule is always attached to each loan agreement. There are specific deadlines and limitation for each installment is counted separately. Assuming that for 10 installments we repaid the first 2 to the 10th day of the month – according to the schedule – the limitation period for the next 8 installments is counted from the date on which their payment expires in the following months. The difference in limitation periods may therefore be 8 months. This means that before the bank contacts us in connection with settling arrears, some installments will be barred and some will not.

There is one more thing to watch out for. Often, if the bank sees that we are not paying back the installments on schedule, it can terminate the contract. In practice, it means that the entire amount we have borrowed is payable. We no longer have to pay back on schedule, and the bank requires a one-time payment of the entire liability.

Limitation periods – changes in rules

Limitation periods - changes in rules

The period of limitation for credit and loans begins from the date when the payment deadline expires, but not necessarily even after 3 years, the limitation period will occur. This is due to changes in regulations that entered into force on July 9, 2018. The dates themselves are calculated according to the division mentioned above, but the end date itself looks different. To facilitate the calculation of the limitation period, it has been established that each limitation period begins on the last day of the year. The debtor is a bit at a loss if his payment date was at the beginning of January, because then, instead of waiting for the limitation period of 3 years, he waits for almost 4 years. However, it is easier just to calculate the deadline, which until now has sometimes been cumbersome to set. Waiting for the debt to expire and counting on the fact that nobody will contact us is tiring and stressful. So instead of looking for prescription, it’s better to start paying off your arrears and regain peace.