Virtually everything around us has an expiration date, but we only associate it with perishable products such as food. Few people know that part of the fine print of loans dedicated to the expiration of these and fewer people still know that, since 2020, the law has been modified.
What do these changes consist of and how do they affect us if we want to apply for a loan? This is what we want to explain to you in this article. Read on to find out when to prescribe a debt .
What is a debt and when does it expire?
A debt is the obligation that a person has to pay or return an amount or a thing and it is also the moral obligation that a person has to give something or correspond to something. Here we understand that debt is economic. If, by necessity or for whatever reason, we must request a loan, we will not only consult which are the most favorable loans for us in terms of terms for repayment, interest or the final installment. Here we explain which are the best personal loans for you.
The modification of article 1964 of the Civil Code through Law 42/2015, in force since October 6, 2015, reduced the general term of the statute of limitations established for personal actions from 15 to 5 years. An action that was included within the “Second Chance” regime for natural persons, established in Royal Decree 1/2015. This legislative change made all debts incurred as of October 7, 2015, expire after 5 years, that is, as of October 7, 2020.
When do you prescribe a mortgage debt?
This measure is not general for all debts, mortgage debts have a different regime since they mature after 20 years from the due date initially set by both parties. Of course, it is very rare for a mortgage debt to prescribe, since there are very clear and marked procedures if the circumstance occurs in which a mortgage is not paid.
Expiry of a personal debt
In the case of customary loans to individuals, the terms for maturity of the debt range between 3 and 15 years and for these debts to prescribe, the following conditions must be met:
- That the creditor, before the non-payment of the debt, does not exercise any legal action by sending a notification or notarial request in which payment is required.
- That the person who has contracted the debt has not expressly or tacitly acknowledged or accepted that there is an outstanding debt.
What does this mean? What does it mean that a debt prescribes? Explained in a somewhat clearer way: if we stop paying a debt , whoever has lent us the amount has 5 years to claim it, otherwise this debt will prescribe. The moment the creditor claims that there is an outstanding debt, this countdown will stop until the outstanding amount is repaid. If it turns out that your debt is not due, check how to repay a personal loan.
Credit card debt expiration
This is one of the most common debts that causes the most headaches. The debt of a credit card prescribes after 5 years , in practically the same conditions as those of a personal debt that we have described previously.
Debts with the Treasury and Social Security
If you are a freelancer or entrepreneur, this part interests you. You will ask yourself: Can a debt with the Treasury and Social Security expire? These offices always claim their debts, even if afterwards the amount owed must be returned to the citizen by the administration. The General Tax Law indicates that, in general, there is a period of 4 years for the administration to request the repayment of a debt. After this time, the debt prescribes.
What about service supply debts?
Sometimes circumstances can lead a person not to pay for water, gas or the phone. In this case, you should know that this type of debt expires after three years. Keep in mind that, in these cases, the companies give enough margin to return the debts contracted before opening the administrative channel.
How much interest can I be charged if I am late in payment?
In case of delay in the payment of a debt you should consult the applicable interest. Usually the contracts that we sign when we apply for a loan indicate in a very clear and understandable way what interest we must pay in case of late payments.
The Azcárate law of 1908 is the one that has established until 2020 what is considered usury in the United States, but this law was modified ending the abusive interests that were established in some loan contracts, especially those of revolving cards .