According to the rules of civil law, property claims (with few exceptions) after a certain time barred. When this happens, the debtor may plead the limitation period and refuse to satisfy the creditor. The bank’s claim resulting from the loan granted may also be time-barred.
The general limitation periods are set out in the Civil Code in art. 118. Pursuant to it, property claims become statute-barred after 10 years, unless a special rule specifies another time on an exceptional basis. However, if property claims are related to running a business, the significance becomes faster, because after three years. The same 3-year period applies for limitation of claims for periodic benefits, e.g. interest.
The limitation period begins to run from the date on which the claim became due. The claim is due when the creditor can demand from the debtor to meet them, and on the part of the debtor such obligation takes place. With monetary debt, in principle, the claim is due when the payment deadline has expired.
The limitation period of the loan.
Banks undoubtedly belong to the category of entrepreneurs, and loans that they provide to their clients are associated with running a business. Thus, the bank’s claim resulting from the unpaid loan expires after 3 years from the day it is due. This applies to all loans, both those granted to consumers and entrepreneurs. The purpose or use of the loan is irrelevant.
In a situation where the loan is repaid in installments, the bank’s claims resulting from individual installments have separate limitation periods, calculated from the date when the installments are to be paid in accordance with the loan agreement. The bank’s claim regarding each of the installments will therefore expire on different dates, as the individual installments have different payment terms, and thus other maturities. In practice, when the borrower does not pay the installments in accordance with the adopted schedule, the bank has the right to terminate the loan agreement. As a result of such termination, the repayment of the entire loan borrowed from the bank becomes payable upon the end of the notice period. Remember that termination of a loan agreement of any kind leads to the maturity of the loan, and thus the obligation to repay it. About when the bank has the right to terminate the loan you will learn from here: When can the bank terminate the loan agreement?
The loan term is 30 days, unless the contract provides for a longer period. In the event of a bankruptcy of the borrower, this period is much shorter and amounts to 7 days. The loan agreement is usually terminated in writing. In this letter, the bank indicates the date on which the loan should be fully repaid. The date so marked will be the starting point for the limitation period when the loan was terminated. He will start running from that day.
The limitation period may be interrupted.
The three-year limitation period for a loan does not mean that in any case, after the expiry of the period counted from the due date, the loan will be time-barred. This would only happen if the bank did not take any action related to the borrower not paying the loan. As a rule, banks take such actions. They consist of:
- applying to the court for granting the enforcement clause to the bank enforcement title – by taking a loan from the bank, the borrower files a declaration on submission to enforcement, under which the bank will be able to issue such a title;
- applying to court with a civil suit, if for some reason it would not be possible to issue a bank enforcement title;
- applying to the court bailiff with a request to initiate enforcement against the debtor – after obtaining a clause of enforceability in court or a judgment or court order.
As a result of each of the above activities, the period of limitation of the loan will be interrupted, and after each interruption the period must run again. At the same time, it should be remembered that the limitation period will not start the run again until the relevant court or bailiff proceedings have been completed. So in simpler terms, if the case is in court or in a bailiff, the limitation period for the loan is red and green. ? When the court proceedings or enforcement proceedings have been completed, the limitation period is moved to the starting line, the green light is given, it starts its run from the beginning and again it must run for 3 years without interruption.
It is possible that a multiple interruption of the limitation period for the same loan claim will occur. After the end of judicial activities and the court issuing the enforcement clause to the bank enforcement title that issued the bank, the limitation period starts running again, but as a result of submitting the application to the enforcement officer, it will be interrupted again. If the execution is not effective and the bailiff dies it because of it, then the limitation period will start running again. However, it may happen that the execution will be initiated again after some time, which will again break the limitation period, etc. In such a situation, the bank’s claim resulting from the loan will expire in an effective manner, if it expires 3 years from the last valid bailiff’s decision to discontinue the execution.
You also need to know that, apart from judicial or court enforcement activities, about which I wrote, the limitation period of the loan will also be interrupted as a result of the so-called. claim recognition by the debtor (borrower). Recognition of a claim occurs when the debtor explicitly declares to the creditor (bank) that he considers the claim to be existing or otherwise unambiguously behaving in such a way that he treats the claim as existing. An example of accepting a claim will be talks or correspondence with the bank regarding the cancellation of loan payments or postponement of their repayment date. Activities of this kind will cause the interruption of the credit limitation period.
Limitation of credit and banking enforcement title.
I wrote about the bank enforcement title in detail here: Bank enforcement title – how does it work? This document, after the enforcement clause has been given to it by the court, may be the basis for initiating the enforcement proceedings against the debtor of the bank. Issuance by the bank, i.e. the act of drawing up this document in accordance with the requirements of the Banking Act, does not interrupt the limitation period for credit claims. On the other hand, he interrupts, as you know, the bank ‘s application in the court to give it a declaration of enforceability. The feasibility clause is a judicial statement, certified by an official seal, that the writ of execution may be the basis for enforcement from the debtor’s assets. While the application is being processed by the court in this respect, the limitation period does not run. Although the actions of the court are limited to the examination issued by the bank only from the formal side and theoretically in accordance with the regulations should not last longer than 3 days, but from experience I can say that it is different from that. After the court has issued enforceability clause, the period of limitation should be counted from the beginning, from the date when the court’s decision in this matter becomes legally valid.
What is very important, the court’s enforceability clause does not extend the 3-year limitation period for the loan. In a situation where the bank will claim credit claims based on bte provided with such a clause, the period of limitation is still 3 years.
The situation will be different if the bank asserts the loan claim on the basis of a court judgment or an order for payment or a court settlement. Then the period of limitation of the loan would extend to 10 years in accordance with art. 125 of the civil code. It is not out of the question, if for some reason the bank could not issue a bte in a specific case and pursue its claims on general terms. In practice, in the vast majority of cases, banks do it based on the bte they have issued
How to raise the plea of limitation?
When the bank asserts its claim on the basis of bte, after the bailiff has delivered a decision on the initiation of enforcement by the bailiff, he may submit a complaint within 7 days to give the enforcement clause bte If the debtor intends to defend himself with the plea of limitation, “shooting from such a “The complaint will not be effective. In such a situation, he should bring counter-enforcement proceedings against the bank. It is in the claim initiating this action that the plea of limitation must be raised and that the court should deprive it of its enforceability on that basis. Importantly, the court does not take into account the statute of limitations ex officio, it can only do so as a result of an allegation raised by the debtor. The counter-enforcement action is brought before the court in whose district the execution is carried out.
The barred debt still exists.
Remember also that even if the debt resulting from the loan has expired, it still exists legally. The debtor raising the plea of limitation “incapacitates” the creditor (bank) and this can not with the help of the court and bailiff successfully enforce it, but it does not mean that the debt disappeared like camphor. Therefore, the debtor of the bank will be listed in this respect in the Credit Information Bureau and in various debtors’ registers.
The barred debt can also be sold to debt collection companies. In addition, if the debtor repays the loan at the bank without knowing that it is expired, he has no right to demand reimbursement of what he has paid.