When do debts expire in Spain

  

It is normal that at some point in our lives we have had a debt to a company or another personIt may even be that we are owed money. Although it is something very common, not many know that when the time comes, A debt can prescribe, that is, it ceases to exist and we want to talk to you about that precisely in this publication.

Are debts forever?

Usually people who incur debt tend to think that their indebtedness prevails until the total amount is paid they have loaned them, in addition to the interest. The truth, however, is that in Spain, debts are not eternal or forever. Debts prescribe and do so in different ways, for example:

• First of all, a debt obviously prescribes when the amount of money owed is fully paid off.
• What is known as “debt prescription ", which occurs when after a certain time has passed, the debt is simply canceled, even if the debtor still does not pay off everything he owes.
• Likewise, a compensation can be presented that the taxpayer who has the debt to the Tax Agency, compensates the debt with the money that should be received as the return of personal income tax.
• Although it is a rare debt prescription, condemnation is also another way that debts prescribe. This situation occurs when the creditor "forgives" the debt.

What is the term in which debts are prescribed in Spain?

In reality everything is based on the type of debt that has been contracted. Currently, the Civil Code in Spain establishes a maximum of one period of up to 5 years for a debt to prescribe, but this only applies to those debts that do not have an expressly established statute of limitations. There are therefore different terms for different types of debts.

• If it is a mortgage loan, the prescription of the debt is established up to 20 years. In the case of a mortgage action, a person who has not specified a special term for the prescription of the debt, the term is 15 years.
• At case of debts with Social Security and with the TreasuryThese prescribe for a period of 4 years.
• If it is about debts for non-mortgage related loans and that have been granted by the banks, the interests that apply prescribe after 5 years. In the case of the main debt, this also lapses after 5 years. However, if the debt was acquired between November 7, 2000 and November 7, 2005, the statute of limitations is 15 years.
• As regards the debts derived from alimony, payment of services, rental of housing, its prescription is 5 years.

What can the creditor do before the prescription of debts?

When the creditor is faced with a situation where the debtor simply does not pay what he owes, he can resort to judicial or extrajudicial procedures to make a claim for payment. In this sense, the current legislation establishes that a creditor can stop the prescription of the debt so that it is not extinguished and he loses his money.

The different ways in which a creditor can interrupt the prescription of a debt are:

• By sending a burofax
• Through a lawsuit
• With a debt recognition process
• Forgoing the loan and consequently receiving payment of the debt

It is important to understand that when the creditor makes any action to claim a debt, what you are doing is basically stopping the prescription of the debt. This means that the time required for the debt to disappear over time starts again from scratch. This of course, once the debtor is informed that this debt claim is being made.

For example, when you have a tenant who has not paid the rent for the property, the creditor can make a claim for payment in a judicial or extrajudicial manner, at any time before the 5 years have elapsed since that debt was incurred. That same 5-year term for the extinction of the debt starts again from scratch.

Extrajudicial claim

If you want to stop prescription of a debt, it is essential that it can be verified that the creditor has contacted the debtor. When something like this happens, the most advisable thing is to send a certified content burofax, in which the payment claim is made. In addition, and with the objective that the debtor can argue that said communication is not well done, it is best that it is written by an expert on the subject, in this case a lawyer specialized in debt claims.

The usual thing is that it is a writing in which the debtor is indicated that he still has a debt payable to your creditor. To give more validity to the document, you can also attach all the information that proves the existence of said debt, although this is not mandatory. In that same document, you are also given a deadline to settle your debt and also indicate the way in which you can make the payment of the debt. This writing does not necessarily have to refer to the interruption of the prescription.

Judicial claim

The judicial claim of the debt requires going through the civil procedure and in these cases the most appropriate is the order for payment process. This process consists of filing the claim, as well as the documentation from which the debt is derived. Once all this is established, the judge requires the debtor to settle what he owes or also oppose it within a period of no more than 20 days.

In the event that the debtor does not settle his debt after the order for payment process has been carried out or even has not appeared at it, then the order for payment process is terminated and that is when the creditor can request the execution. Now, if the amounts that are being claimed in the order for payment process exceed € 2.000 and the debtor objects, then in the declaratory process derived from this situation, the intervention of both a lawyer and a solicitor will be required.

Then the judge will be given the task of addressing the claims of both parties and will determine whether or not there is a debt. In the event that the judge's resolution favors the creditor, then it will establish a period for the debtor fully liquidates his debt. If despite all this, the debtor does not want or cannot pay what he owes, then the last resort is the process of execution of judgment, in which what proceeds is the seizure of the debtor's assets to cover what is should.

What about the prescription of debt on a credit card?

Currently, the prescription period of debt on a credit card is 5 years, which are counted from when the fulfillment of the obligation can be demanded. It is worth mentioning that previously, the statute of limitations was 15 years, but thanks to the reform in article 1964.2 of the Civil Code, it is now only 5 years.

Most of the time when you have one credit card debt, the claim is made through an order for payment procedure. In the case of the prescription of a credit card debt, it is necessary to argue this circumstance as "Reason for opposition" to the order for payment process.

This change in prescription of a credit card debt, assumes that all debts that come from a credit card and that have been contracted after November 7, 2015, have a statute of limitations of 5 years from which compliance may be required.

On the other hand, all credit card debts after November 7, 2005 and before November 7, 2015, will be prescribed on November 6, 2020. In the case of credit card debts before November 7, 2005 of November 15, will have the term that mediates from the moment in which compliance could be required, in addition to XNUMX years.

Do debts with banks and Social Security prescribe?

If you want to know at what time do debts with banks expire, The first thing you should do is check what type of loan you have contracted. Currently, the prescription of debts with banks has a term of 15 years that is counted from the last notification to the debtor.

In the case of Social Security, current legislation establishes that the debt expires after 4 years, but only in the following situations:

• Actions to impose sanctions as a consequence of failing to comply with the Social Security regulations
• Actions to demand the settlement of the debt for Social Security contributions
• Rights of the Social Security Administration for the determination of all those debts with Social Security and that they are quotas.