With a delinquency rate close to 11% sure that many have the same question, do debts prescribe? The answer is simple: yes. Although they do not disappear, they do prescribe and the creditor’s right to claim them expires. And, it is not possible to require a outstanding debt eternally, since that would suppose a legal insecurity that the Spanish legal system does not contemplate. The creditor’s right to collect is limited in time and the law admits the extinction of debts, as explained in Bankimia.
Thus, and as contemplated in article 1961 of the Civil Code, actions to claim judicially and extrajudicially the payment of debts “prescribe for the mere period of time established by law.” However, for a prescribed debt two requirements must be met:
That creditor has not exercised any extrajudicial action by letter, notarial requirement, etc … or judicial.
That the debtor has not been recognized this right, that is, that he has not been accepted, either expressly or tacitly, that he has an outstanding debt.
That is, the extinction of the debt is due to negligence or abandonment of the creditor. The statute of limitations depends on the nature and origin of the debt, although in most contracts a general period of 15 years is set, unless a specific time is specified.
The statute of limitations begins to count from the moment the creditor was able to claim the debt and did not. But this, however, can be interrupted at any time with some action by the creditor. According to the 1973 article of the Civil Code, “the prescription of the actions are interrupted by their exercise before the Courts, by the extrajudicial claim of the creditor and by any act of recognition of the debt by the debtor”.
That is to say, if the creditor reliably claims the collection of the debt -before the prescription of the same- will have to face his payment.
Deadlines for considering that a debt has been prescribed
According to the Civil Code in its article 1964, “Debts from a personal contract that do not have special terms indicated will prescribe for 15 years”. However, the terms vary depending on the nature and origin of the debt.
1. Mortgage debts
According to article 1964 of the Civil Code, the term of limitation of a mortgage debt is 20 years from the expiration date that the loan for the purchase of the home is initially set.
2. Credit Card Debts
Although annual or monthly payments prescribe in 5 years, this term is not applicable to credit cards whose prescription is 15 years. In the contract, the issuer is obligated to benefits in exchange for the payment of an annual fee and to pay the amounts arranged in the agreed manner. When a credit card is contracted, a personal credit opening contract is established between the bank and the cardholder, which is subject to the general term of 15 years. The entity therefore has that period to claim the unpaid fees and late payment interest from the holder.
3. Debts with the Treasury
According to article 66 of the General Tax Law, the right of the Administration to determine the tax debt by means of the appropriate liquidation prescribes for 4 years, counting from the day following the day on which the regulatory deadline to submit the corresponding declaration or self -assessment Except tax debts for having accounts or securities abroad, which they will not prescribe, according to the anti-fraud plan approved by the Government.
Those capitals and hidden assets, once they arise, will be charged to the last of the years that have not been prescribed, so they may be required even if the current four years have elapsed to the prescription by administrative means.
4. Debts with Social Security
According to article 21 of the General Law of Social Security, after four years they will prescribe the following rights and actions:
The right of the Social Security Administration to determine the debts with the same whose purpose is constituted by quotas, through the appropriate settlements.
- The action to demand payment of debts for Social Security fees.
- The action to impose sanctions for breach of Social Security regulations.
Regarding the obligations with Social Security, whose purpose is resources other than quotas, the statute of limitations will be the one established in the applicable norms due to their legal nature. The prescription will be uninterrupted for the ordinary reasons and, in any case, for any administrative action carried out with formal knowledge of the person responsible for the payment leading to the settlement or collection of the debt and, especially, for its administrative claim through claim. . . of debt or act of settlement.
5. Debts of domestic supplies
Debts contracted with the water, electricity, gas, telephone and telecommunications supply companies prescribe for 5 years, actions to demand payments of shorter years or terms (monthly or bimonthly), in accordance with article 1966.3 of the Civil Code. However, jurisprudence does not agree on the period of limitation of these services and some courts apply the 3-year term established in article 1967.3 of the Civil Code, according to which the actions to demand the obligation to pay merchants The price of the goods sold prescribes in 3 years.
6. Debts for rent, leases and food pensions
According to article 1966 of the Civil Code, the actions to demand the payment of the food and the satisfaction of the rental price of rural or urban farms is 5 years.
In any of the aforementioned cases, the prescription is not considered valid for the mere duration of the legal term. It must be assumed at the request of the party. If the debtor does not assert this action, the prescription will not come into play automatically.