Absolutely YES . Agreements signed with loan companies are regulated by the Civil Code. Specifically through Article 118:
Art. 118. Unless a special provision provides otherwise, a limitation period
is six years, and for claims for periodic benefits and related claims
with running a business – three years . However, the end of the deadline
the limitation period falls on the last day of the calendar year, unless the time limit
the limitation period is less than two years.
This means that the claim arising from the short-term contract is time-barred after 3 years and the period remaining until December 31st last year.
The limitation period for claims is counted from the date on which repayment was to take place (in the case of installments this period is calculated separately for each installment).
Does this mean that to get rid of payday pay just wait 3 years?
The legislator has provided for a number of exceptions that interrupt the limitation period. They were described in article 123 of the Civil Code:
Art. 123. § 1. The limitation period shall be interrupted:
1) by any act before a court or other body appointed to
examining cases or enforcing claims of a given type or before
an arbitral tribunal taken directly to investigate or
establishing or satisfying or securing a claim;
2) by recognizing the claim by the person against whom the claim
3) by initiating mediation.
When payday loans expire
During these 3 years, the creditor (loan company) may interrupt the limitation period by:
- taking action before a court or other enforcement authority (e.g. filing a lawsuit, ordering enforcement proceedings, initiating mediation or settlement proceedings, etc.)
- debt recognition by the debtor (e.g. by negotiating with a debt collection company, written or verbal / telephone confirmation of the debt)
If such action is taken, the new limitation period shall run from the date of its performance. E.g:
The mere receipt of a request for payment (even with a return receipt) does not interrupt the limitation period!
Due to the above principles, loan companies operate on two plots:
- First of all – they carry out permanent debt collection activities in relation to their debtors.
- Secondly – in justified (and cost-effective) they take legal action against debtors.
Limitation of payday loans and debt collection
The purpose of debt collection is not only to induce the debtor to voluntarily settle the obligation. Debt collection companies are able to assess the financial standing of their clients and know perfectly well that taking legal action is not always profitable. However, the situation of debtors may change over time. Therefore, they try to prevent the debt from being time-barred.
In this case, the goal of the debt collection company is Debt sustainability. This means that if you have a commitment to a loan company, at least once in a while a company representative will visit you at your place of residence (or have a phone conversation) where they will try to get your debt recognition .
Such recognition may take the form of a paper document (e.g. an appropriate statement). However, debt collection companies are known for various tricks that help them “insidiously” get such recognition.
You can mention here, for example, recorded telephone conversations in which a company representative tries to force the interlocutor to admit having debt to the company and to start negotiations. Records of such conversations may constitute evidence before a civil court.
Until now, it has been a common practice for debt collection companies to buy outdated claims (for next to nothing). Then, employees of debt collection companies tried to take advantage of the debtors’ ignorance and get them to pay expired debts.
Therefore, if you would like to cite the limitation period – it is best not to make any contact with the debt collection company. Remember that the debt collector is not a public official and you do not have to talk to him or let him into your place of residence.
You can read how to deal with a debt collector in the article – what a payday debt collector can do.