Limitation of credit and loans – when not to pay back your debt?

If you have a loan or non-bank loan on your account, you must adhere to the set deadline for repayment of installments and the entire liability.

However, there are various random situations and problems with financial liquidity that prevent the timely settlement of debt. In this case, you should extend the repayment deadline, borrow additional cash for repayment or try to avoid repayment if the loan has expired. What is this about?

Limitation of credit and loans – what is it?

Prescription of a bank loan or non-bank loan takes place after a specified repayment date and a deadline set by law . After this date, you can simply refuse repayment to the creditor without any further consequences.

According to the provisions in the Civil Code, art. 117 all property claims are time-barred. The exact dates are legally defined. You will find them in the table below.

When are the debts aging?

July 9, 2018 amendments to the provisions governing the limitation period for claims have entered into force. The limitation period for loans from a private individual has been reduced from 10 to 6 years, and the limitation period is the last day of the calendar year, not even two / three / six years after the repayment date.

Expiration of a bank loan – details

As you can see, an unpaid bank loan expires quickly – three years are enough not to worry about repayment. However, there is one but because it is possible to interrupt the limitation period and then the matter gets complicated. Before the specified limitation period, the bank may:

  • apply to the court for repayment,
  • apply to the court for an enforcement clause,
  • refer the case to a bailiff to initiate enforcement.

If the installments are not regulated or your creditworthiness is lost, your bank may terminate your loan agreement . This is regulated by the Banking Law: the notice period is 30 days, and in the event of a threat of bankruptcy of a person with a loan – only a week. Then all your unpaid installments will become due at the end of the notice period. In a word, you can’t escape your responsibility and your outstanding debts.

Limitation of non-bank loans – details

Limitation of non-bank loans - details

Non-bank loans also expire, moreover, after the same time as cash loans. This applies to both natural and self-employed persons. The loan repayment deadline obliges you to pay back the amount borrowed by the last day of the contract.

Quick non-bank loans, the so-called payday loans are characterized by a low loan amount and a short deadline – usually after a few or several dozen days. The statute of limitations will be calculated from the date of the payday payment.

As for installment loans, the situation is the same as for a bank loan – the limitation period will be calculated from each installment separately, taking into account the designated date of repayment of the liability of each of them.

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