The Statute of Limitations on Credit Debt
It often happens that the Bank requires the borrower to repay the debt on the loan a few years after the expiration of the contract. In practice, in this regard, the question arises about the determination period during which the lender (Bank) may apply to the court with the claim about the return of credit debt.
Since squabbles between banks and troubled borrowers can sometimes drag on for years, thanks to this law there is a loophole through which the borrower, who stopped making payments on the loan, can avoid the need to repay the debt legally. This means that if there was no connection between the Bank and the debtor within three years, the debt can be canceled. Theoretically, everything is very clear, but in practice, you can face all sorts of nuances.
How should the debtor behave in order to increase the probability of debt cancellation?
The first catch is the Statute of limitations on the loan, which begins to count from the moment when the first payment was missed. But it is canceled at the first appeal of bankers to the debtor, and then begins to tick again. That’s the whole point. For example, you hope that for three years the bankers would forget about you, will not disturb any calls or registered letters. But you made a mistake, picked up the phone, signed for a letter… the Contact between you and the Bank took place, as a result of which the 3-year period started again.
However, experienced lawyers can cling to some details. According to them, the Bank has no way to prove that it was you who took the phone and not someone from your relatives, which means that there was no contact actually. When the debtor signs for the letter, it confirms only the fact of receipt of the letter, but no acquaintance with the debt. It’s possible he threw the letter away without reading it. It turns out that in court practice, there are cases when the Bank cannot provide strong evidence of its contact with the problem borrower, then 3 years are counted from the date of the first payment skip, and when the Statute of limitations on the loan is over, the debts will be forgiven officially.
It happens that the Bank does not bother the debtor because he sold the debt collection Agency. The fact of the transfer of debt to a new person does not mean the resumption of the limitation period on the loan. Therefore, after 3 years, neither the Bank nor the collectors have the right to demand repayment of the debt from the borrower.
It’s not that simple…
Collectors, using loopholes in the legislation and gaps in legal knowledge of citizens, often demand repayment even after 3 years. However, according to lawyers, each of the cases has its own subtleties and each of them should be dealt with separately. For example, some loan agreements contain a condition that the loan agreement may last until the loan is fully repaid by the borrower.
This is sometimes adopted by banks and collectors. Remember, in any case, the Statute of limitations on the loan in many countries is 3 years, and the additional condition prescribed in the loan agreement, has no legal value!