When do debts expire in Spain?

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It is normal that at some time in our life we have had a debt to a company or another personWe may even be owed money. Even though it is very common, not many know that when the time comes, A debt can prescribe, in other words, it ceases to exist and that is exactly what we intend to talk about in this publication.

Are the debts final?

Por lo general, las persons que contraen deudas tienden a pensar que su the indebtedness prevails until the full amount is paid They have loaned them, at the same time from interest. The truth, however, is that in Spain debts are not eternal or definitive. Debts prescribe and do so in different ways, for example:

• First, a debt apparently prescribes when the amount of money owed is paid in full.
• What is known as «debt prescription «, which arises when after a certain time, the debt is basically canceled, even if the debtor still does not pay everything he owes.
• Likewise, a compensation can be presented so that the taxpayer who has the debt with the Tax Agency, compensates the debt with the money that must be received as a return of personal income tax.
• Although it is a rare debt recipe, expropriation is also another way in which debts are prescribed. This situation occurs when the creditor "forgives" the debt.

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

In fact everything is based on the type of debt that has been incurred. At this time, the Civil Code in Spain defines a maximum period of up to 5 years to prescribe a debt, But this only applies to those debts that do not have an expressly established limitation period. In this way, there are different terms for different types of debt.

• If is one mortgage loan, The prescription of the debt is defined until the age of 20. In the case of the mortgage action, a person who has not specified a special term for the prescription of the debt, the term is 15 years.
• In that case of debts with Social Security and with the TreasuryThese prescribe for a period of 4 years.
• If it is 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, it also prescribes 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 to debts derived from alimony, payment of services, housing rent, 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 basically does not pay what he owes, he can resort to judicial or extrajudicial procedures to make a claim for payment. To this end, the current law defines that a creditor can stop the prescription of the debt so that it does not expire and he loses his money.

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

• Sending a burofax
• Through a lawsuit
• With a debt accreditation procedure
• Give up the loan and consequently receive the payment of the debt.

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

As an example, when you have a tenant who has not paid rent for the property, the creditor can claim payment in a judicial or extrajudicial manner, at any time before the 5 years have elapsed since said debt was contracted. That same period of 5 years for the extinction of the debt starts again from zero.

If you want to stop prescription of a debt, es fundamental que se pueda chequear que el acreedor se ha puesto en contacto con el deudor. Cuando ocurre algo así, lo más recomendable es enviar un burofax de contents certificado, en el que se hace la reclamación de pago. Al mismo tiempo, y con el fin de que el deudor pueda argumentar que dicha comunicación no está bien hecha, lo ideal es que esté redactada por un experto en la materia, en este caso un abogado especializado en reclamaciones de deudas.

Lo usual es que be un escrito en el que se indica al deudor que todavía tiene 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, even though 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 needs to go to the civil route and in these cases the most appropriate is the payment procedure. This procedure consists of filing the claim, as well as the documentation from which the debt is derived. Once all this has been established, the judge requires the debtor to settle the debt 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 payment requirement procedure has been carried out or even if he has not appeared before it, the payment requirement procedure is terminated and that is when the creditor can request execution. Now, if the amounts that are being claimed in the payment requirement procedure exceed € 2,000 and the debtor objects, then in the declaratory procedure derived from this situation, the intervention of both a lawyer and a solicitor will be required.

Afterwards, the judge will have the task of hearing 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 deadline for the debtor fully pays off his debt. If, however, this, the debtor does not want or cannot pay what he owes, then the last resort is the execution of the judgment, in which what proceeds is the seizure of the debtor's assets to cover what he owes.

What about the prescription of debt on a credit card?

Currently, the the limitation period for credit card debt is 5 years, los cuales se cuentan a partir del momento en que se puede exigir el cumplimiento de la obligación. Cabe mencionar que previamente el plazo de prescripción era de 15 años, pero gracias a la reforma del post 1964.2 del Código Civil, ahora es de solo 5 años.

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 payment order procedure.

This change in prescription of a credit card debt, It is assumed 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, November 2020 to November 2005, will have the average term from the moment in which compliance could be required, at the same time as 15 years.

Do debts with banks and Social Security prescribe?

If you are interested in knowing what time the debts with the banks are due, The first thing you should do is check what type of loan you have contracted. At this time, 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 law defines that the debt prescribes after 4 years, but only in the following situations:

• Actions to impose sanctions as a result of non-compliance with Social Security regulations
• Actions to demand the settlement of the debt for contributions to Social Security
• Rights of the Social Security Management for the determination of all those debts with the Social Security and that are quotas.