Limitation of debts takes place after the expiry of specific deadlines specified in the Civil Code. Most obligations expire after 6 years from the date of their creation. However, not every claim is time-barred, and the limitation period itself can be interrupted by the creditor at any time. The court has the obligation to check whether the debt has expired.
Limitation of debts – when will it happen?
Limitation of claims is a matter of interest, above all, to those who have fallen into a spiral of debt and cannot currently afford to pay their debts.
Due to the amendment to the relevant provisions of the Civil Code, the basic limitation period for claims was reduced from 10 to 6 years.
The changes proposed by the Ministry of Justice were approved by the government in January 2018. The amendment to the Civil Code, the Code of Civil Procedure, the Act on enforcement proceedings in administration and the Act on access to business information was adopted on April 13, 2018. The amendment to the current regulations is explained primarily by the good of the consumer.
They are also to counteract dishonest practices of debt collection companies and buying claims. Although the new legal regulations entered into force on July 9, 2018, still many people are not aware of when the limitation period is taking place.
As a rule, the amended act shortens the basic limitation period for claims from 10 to 6 years. It looks a little different in the case of claims arising from running a business and such periodic benefits as renting or leasing. Here, the limitation period for debt has not changed and it is as it has been so far – 3 years.
It is also worth knowing that although the concept of limitation of claims exists, unpaid liabilities do not expire “ex officio”. When the debt expires depends primarily on the type of outstanding debt. In practice, the limitation period for the debt is calculated from the due date, i.e. from the day on which we were to fulfill our benefit.
Therefore, we will be in contact with the limitation period when the deadline set out in the Act for civil claims expires. If the creditor does not take any legal steps against the debtor during this time, the indebted person may, in accordance with applicable regulations, refuse to comply with the claim.
This does not mean, however, that the statute of limitations ceases to exist, as the claim for limitation to avoid payment must be raised by the debtor himself. This results from Article 118 of the Civil Code. If the debtor sued by the creditor does not know that he has such an obligation, he will simply not take advantage of the limitation and he will have to repay the obligation.
Good information for indebted people is, however, that with regard to expired claims, the creditor will not be able to use state coercion measures to enforce them. Let us remember, however, that even time-barred debt still exists in legal circulation, it becomes a natural obligation and the creditor can demand repayment.
In addition to the fact that the debts expire faster, the method of calculating the expiry of the limitation period has also changed. In the light of the current regulations, the limitation period ends on the last day of the calendar year. Thus, the limitation periods have been slightly extended. The exception to this rule are those obligations that expire earlier than after 2 years.
Limitation of claims – how to calculate the time limit?
In the Civil Code we will find two basic limitation periods for debts. The first of these is 6 years and applies to all property claims or claims confirmed by a final court judgment. The second relates to claims arising from the conduct of business activities and periodic benefits – these categories of financial liabilities expire after three years.
When other types of claims expire, we discuss below:
- fines and claims arising from the contract of carriage and the preliminary contract of sale will expire after one year,
- the entrepreneur’s claims arising from the invoice not paid by the customer, claims under the sales contract and the supplier’s claims under the completed delivery have a two-year ‘validity period’,
- after two years the claims arising from the concluded work contract (from the date of delivery of the work) and the claims arising from the provision of telecommunications services are time-barred,
- the two-year limitation period for debt relates to claims arising from the concluded bank account agreement; the claim limitation period is calculated from the date on which the debit should have been repaid,
- after three years, receivables arising as a result of conducting business activity, the amounts due to contractual penalties, which were included in the contract drawn up between contractors and the unpaid or unpaid prepayments or advances,
- we also have three years to assert our claims in connection with the employment contract or insurance contract,
- the period in which the obligations arising from the credit or loan agreement are time-barred has also been laid down by law it is 3 years from the date on which the repayment obligation arose,
- to settle arrears in repayment of rent or debt on a credit card, as in the aforementioned cases, we also have 3 years.
Tax liabilities and inheritance debts are a bit more complex issue
In principle, we have 3 years to settle the former, counting from the end of the calendar year in which the tax obligation arose. In turn, after 5 years, legal obligations such as income taxes, VAT or taxes on civil law transactions expire.
In the case of inheritance debts, the limitation period is 6 years, provided that the creditor does not take action to recover the amount due. With respect to other types of claims, the obligation to pay has been confirmed by a final court judgment, the limitation period is six years.
Can a debt that has expired be recovered?
It is clear from the provisions of the Civil Code that the limitation period for a claim is the same as the expiry of the liability. However, this does not mean that the creditor who wants to recover his claim has no legal instruments at his disposal. First of all, he should watch over payment deadlines and prevent “past due” payments.
In order for the debt not to be time-barred, it should be stopped as soon as possible. Taking any action in this matter will cause that the limitation period will be counted anew and the current period will be treated as non-existent. The way to prevent claims being time-barred is any action before the court (e.g. a lawsuit), mediation or debt recognition by the payer. Often, just filing a claim or sending a request for payment proves sufficient to recover the amount due.
Limitation of debt – is it worth it to count on?
Commitments incurred should be repaid. And it is worth doing it before recovery takes place, and the bailiff will deal with the matter. The more so that debt collection entails additional costs, which (if obliged to pay the debts) will have to be paid by the debtor. Therefore, despite the fact that there are some situations in which debt may be time-barred, it is not worth waiting for.
Instead of counting on a statute of limitations for a claim, which does not have to be at all, it is better to try to communicate with the creditor and set a convenient repayment schedule. This applies even to the smallest receivables, because those increased by the costs of debt collection may already be a considerable burden for the portfolio.
Obviously, it is best to prevent our debts from being in default. Having such “overdue payments” reduces creditworthiness and results in the transfer of our data to debtors’ databases. Listing in such registers as BIK or KRD, we will not receive credit or loan, we will not buy anything in installments, nor will we receive a subscription phone.
The list of inconveniences that we will face then is quite extensive, so you should not ignore requests for payment or attempts to contact the creditor. Let us remember that the debt ignored by us will not cease to exist, and “burying our heads in the sand” is the worst thing we can do in such a situation. The more that our calculations related to how long it takes for the debt to expire, can be effectively interrupted by the creditor’s intervention. If he tries to recover the amount due, limitation may never occur.