Statute of limitations on a loan

What is the statute of limitations for a loan

The statute of limitations (SL) for a loan is the period during which a bank has the right to recover accumulated debt from a borrower. After its expiration, in accordance with Article 199 of the Civil Code of the Russian Federation, representatives of the financial organization can still apply to the court with a claim to protect violated rights, but the chances of it being satisfied are minimal. If before the ruling is issued the defendant submits a petition indicating the expired limitation period, the law will be on the borrower's side.

What is the duration of the statute of limitations and when does it begin

Article 196 of the Civil Code of the Russian Federation establishes a general statute of limitations of three years, which is also valid for bank loans. Taking into account all possible interruptions in its calculation, which we will discuss later, the maximum period after which obligations to pay the debt can be written off from the debtor is 10 years.

Before the clarification by the Supreme Court of the Russian Federation in 2015 regarding the application procedure of Article 200 of the Civil Code of the Russian Federation, there were many discrepancies in judicial practice regarding the commencement of the limitation period. Now it is determined quite precisely: if the loan agreement terms provide for periodic (most often monthly) payments, then the limitation period is calculated separately for each such scheduled date. That is, you need to count 3 years from the moment arrears arise for each payment. If at the time the creditor applies to the court for several payments the limitation period has already expired, then they cannot be recovered.

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Statute of limitations on a loan for a guarantor

Two concepts should be distinguished: the statute of limitations and the guarantee period. The period for which a guarantor assumes responsibility for fulfilling obligations can be specified in the agreement. Otherwise, it is determined by Article 367 of the Civil Code of the Russian Federation. The SL for a guarantor is calculated in the same way as for the borrower—from the moment the debt arises for each payment. At the same time, the bank can demand the return of funds only within the validity period of the guarantee.

Statute of limitations on a loan of a deceased borrower

The death of the borrower does not entail the termination of obligations under the loan agreement; the bank must receive the money one way or another. Responsibility for repaying the debt falls on the shoulders of the persons who accepted the inheritance. At the same time, the opening of the inheritance does not interrupt the course of the limitation period, and upon the expiration of three years from the date the loan debt arose, the bank will not be able to return the funds. Who was listed as the borrower at the time the arrears appeared, the deceased or the heir, does not matter.

Debt recovery period for a credit card

As with a regular consumer loan or car loan, the SL for a credit card is 3 years. The agreement concluded when issuing a credit card must define the date of monthly provision by the bank to the borrower of a card account statement. Such a statement indicates all payments and receipts on the card, accrued interest and penalties, as well as the amount of debt, the amount and date of the minimum payment. If this date is missed, the bank charges a penalty in the amount provided for by the tariff. If the borrower evades fulfilling their obligations, the financial organization has three years from the date of default on the account to recover the debt through the courts.

Cases of interruption of the limitation period

The period after which the bank loses the opportunity to recover the debt can be interrupted if the individual acknowledges their obligations. This can be served by:

1. Applying to the creditor with a request to change the terms of the agreement or provide a deferral, in which the borrower expresses consent to the amount of their obligations.
2. Acknowledgment of a claim or an act of mutual reconciliation of settlements.

It should be borne in mind that after an interruption, the SL is calculated anew; the previous period will not be counted. Unofficially recorded conversations with bank employees, partial payment, or a visit to the institution for a reason not related to an unpaid loan cannot serve as a reason to suspend the countdown.

How to behave upon expiration of the statute of limitations

You should not hope that after 3 years the creditor organization will stop contacting you to recover the debt. How can you stop the bank's actions?

If the bank has gone to court

If you receive a court summons demanding you appear at a hearing, you must not ignore it under any circumstances. Firstly, failure to appear entails liability before the law. Secondly, the court will take into account the expired limitation period only upon your application during court proceedings before a decision is made. Otherwise, the bank's demand for the return of funds may be satisfied.

Bank employees continue attempts to recover loan debts

Often, even after three years, the lender uses all possible ways to contact the debtor—written demands to the place of registration and residence, phone calls, and text messages. The financial organization can also turn to collection agencies for help in recovering money from an unscrupulous borrower, in which case, among other things, you can expect home visits and notification of the employer about the current situation. To reduce the pressure on you, write an application to the bank to revoke your consent to the processing of personal data. If the measures taken by debt collectors seem illegal to you and significantly complicate your life, contact the police and the prosecutor's office.

What amount of debt will prevent you from traveling abroad

In 2022, the amount of debt that will bar a citizen from traveling abroad is 30,000 RUB. But we are only talking about the situation when enforcement proceedings have been initiated and/or there is a court decision. If the statute of limitations for unpaid loans has expired, especially if you have an exonerating court decision in hand, there should be no problems when leaving the country. But just in case, before buying tickets, it is better to check for restrictions on the website of the Federal Bailiff Service of Russia.

Is the transfer of debt to collectors legal

It is legal only if such a possibility is provided for in the agreement. The creditor does not have the right to transfer client data to an organization that does not have a license to carry out banking activities. In addition, the collection agency must be included in the state register of legal entities carrying out activities for the return of overdue debt as their main type of activity. It can be found on the website of the bailiffs.

In which cases can a debt legally not be paid

There are only 3 situations when a loan is written off:

• the borrower is declared bankrupt;
• the occurrence of an insured event provided for by the agreement (loss of job or deterioration of health);
• the loan is recognized as unrecoverable by the bank itself.

If you find yourself in a difficult life situation, it is better to try to negotiate with the financial institution rather than hiding. There is an option to apply for credit holidays or debt restructuring.

The statute of limitations is the period the bank has from the moment a delinquency arises to recover the debt. Often, as early as the day after the scheduled payment date, the creditor reminds the client of the current situation and may apply penalty sanctions in the form of fines and/or an increase in the interest rate (if the latter is provided for by the agreement). You should not hope that the bank will forget about you — during this time your debt will grow, and if you go to court, all the creditor's expenses may be assigned to you.