Most people struggling with debt or a spiral of debt ask themselves the title question, when the debts expire, virtually all debts are subject to limitation and only time and applicable law is the only variable in this topic.
What exactly is debt aging?
Pursuant to the applicable law and the provisions of the Civil Code, the notion of limitation of debts can be defined as the possibility of avoiding the need to repay a given debt after a specified period of time from its conclusion.
In practice, this means assigning expiration dates to specific debts, however, when this period expires by law, the debt does not disappear but the debtor (indebted person) has no legal obligation to regulate it towards the creditor.
After what time exactly do debts expire?
Each type of debt owed to an entity has a different nature and legal maturity, in practice, it means a different limitation period for the institutions concerned, more precisely it looks like this:
- Debit on the bank account – the statute of limitations expires after 2 years and the period is counted from the date on which the debt should have been settled, in the case of an indefinite contract this means the date of the first request from the bank to repay the debt – this applies to all claims under the bank account agreement
- The claim required due to a specific work/commission contract – 2 years
- Arrears resulting from telecommunications services (subscription) – 2 years
- Requirements under the contract of sale or delivery of goods and services – 2 years
- Credit card debt – 3 years
- Loan / credit agreement – 3 years
- Unpaid rent – 3 years
- Demands from the employment contract – 3 years
- All commitments related to business operations (JDG) – 3 years
- Deposit / advance / prepayment claims – 3 years
- Prescription regarding a blank promissory note – 3 years
- Claims under an insurance contract – 3 years
- All debts related to the force of law (taxes and other) – 5 years, for example, VAT or income tax or on civil law transactions
- Debts relating to succession – 6 years (only in the case of the inaction of creditors)
- Other debts and claims resulting from a final judgment of a court or other institution appointed for the target case – 6 years
- Mortgage – 6 years applies only to interest due to the security of the real estate and high amounts.
We have really exchanged only a large part, but not all matters relating to the limitation period, as a result of recent amendments to the law, the limitation time has been reduced from 10 to 6 years.
Can you interrupt the limitation period of debt?
Creditors may interrupt the limitation period in several ways, one of which is the voluntary acceptance of debt by a person who is subject to dilution, the exact name of this type of action is “voluntary submission to enforcement” if we sign such a document.
We are fully aware of the debt, we stop the limitation period and let us punish ourselves according to the contract with the creditor. Liabilities for voluntary submission to enforcement completely interrupt the limitation period.
The second way for creditors to interrupt the limitation period for a given contract is to take action by the court, any final judgment issued interrupts the limitation period for debt, it is often the loan companies that use this gate interrupting the course and extending it practically indefinitely.
Does the statute of limitations mean a better credit history?
Absolutely not, according to what we wrote earlier, the limitation period does not mean its repayment or disappearance simply changes its requirement for the person who took the debt.
The only way to improve your credit history is to pay back the debt or spread it over installments and negotiate with the creditor to improve your entries.
What about GFI, GFIC and GC databases after the debt has expired?
Regardless of the statute of limitations on the debt, the creditor may still make an entry in each of the databases regarding our credit history, which is important, such entry shall not be time-barred until it is removed by the creditor.
Which is only possible when the obligation is closed, i.e. repayment of the total debt. Only then can we contact the creditor to remove the unwanted entry in the database.
From equally important information it should be said that the creditor making the entry to the said databases must provide the date of occurrence of the given arrears.
The minimum amount on the basis of which you can be found in GFI, GFIC or GC is USD 200 in relation to the debts of individuals and USD 500 in companies.