When do they prescribe debts? We tell you
In Spain, according to the civil code, debts tend to prescribe over a period of five years. There are many factors that determine the time of prescription or maturity of a debt incurred with a financial entity.
To be able to know if the acquired bank debt or the money pending payment has come to prescribe it is necessary to make a deeper study of the type of indebtedness that one has. The period really varies from three years to twenty years.
When do they prescribe debts?
In Spain, debts tend to prescribe according to the type of indebtedness that was acquired at the time. The number of years that pass for these debts to prescribe range from three to twenty years.
However, there are many ways to declare that a pending obligation came to prescribe:
- In case of payment: naturally, a paid load is automatically a commitment that no longer exists and, therefore, we can say that prescribed.
- Prescription of the debt: when a certain time of between 3 and 20 years has passed with the same liability, which is not mortgage, and this has not been paid, it is canceled.
- By compensation: in this case, the debtor gives a compensation that replaces the money that is owed, therefore, somehow cancels the outstanding balance.
- Forgiveness: although this happens a few times, the creditor may decide to pay off the debt, even if it has not been so, but for all purposes, it will appear as a settled obligation I prescribed.
It is normal to believe that all commitments are made “until the end of time”, but it is not so. In this article, we tell you.
When do you prescribe a personal loan?
When a loan is requested from a bank, as long as it is not a mortgage, these debts and their interests come to prescribe.
Any non-mortgage bank loan, whether a personal loan or credit card, comes to prescribe after five years. Originally the borrowings generated by the credit card prescribed at fifteen.
Debts acquired between November 7, 2000, and November 7, 2005, by law, continue to be prescribed at 15 years.
However, currently, this statute of limitations has been reduced from 15 to 5 years.
It is important to review all articles associated with bank credit cards, as there are some “small letters” that must be taken into account.
Differences between expiration and prescription of a debt
The words “prescribe” and “expire” are often considered synonymous words with each other, however, they are not, and much less in Law. To understand the difference between a noun and another in a simple way we explain it through an example.
It is known that dehydrated foods have a long lifespan, however, it is mandatory to put a day of expiration, which we can consider as its date to prescribe, but not expiration. That is, this date is decided for consumer safety, as is the prescription of debt, however, these foods never expire.
On the other hand, milk and other foods expire, that is, they expire. The date that appears written on its packaging determines the moment in which the product in question, for health reasons, in this case, can no longer be consumed. In personal debts, the expiration comes when the right to collect the debt can no longer be exercised and, therefore, the law that could regulate this debt ceases to be valid. On the contrary, the prescription of the load is given when it has been a long time since it was contracted and although it remains in force and will never disappear, it has been prescribed for the passage of sufficient time.
Most common deadlines for prescribing debts in Spain
Initially, it was explained that the most common time used for a debt to be prescribed is five years, but this changes according to the type of cargo acquired:
- Mortgage loan: depending on the conditions in which the loan or credit with the bank is requested, it can vary from fifteen to twenty years until its prescription.
- Non-mortgage bank loans: these include commercial debts acquired with credit cards and prescribe after five years.
- Social Security and Finance: these obligations have a term of four years to prescribe.
- Other debts: those related to alimony, general services or rent payment, among others, prescribed at 5 years.