Finanziamenti

When prescribing an unpaid loan

Credits expire after a certain period of time established by law based on the type of right.
This means that creditors must be very careful and demand the payment they are entitled to while they are on time, otherwise they lose all rights to it.
Obviously for debtors the perspective is diametrically opposite: the statute of limitations arises like a godsend that allows them to no longer pay the debt without incurring any type of consequence.
All credits expire, including financing (both loans and mortgages).
It is not so easy for a bank or finance company to forget to request payment, but it is not completely impossible for this to happen, exempting – even partially – the debtor from payment.
Here's what you need to know about the statute of limitations on unpaid loans.
When an unpaid loan is prescribed As anticipated, not all credits have the same limitation periods, as there are various exceptions contemplated by the law based on the particular characteristics of each one.
The loans, however, are not mentioned in any rule on short prescription and for this reason they follow the ordinary rule, as established by the Civil Code.
In particular, article 2946 establishes that rights are prescribed within a ten-year period, unless the law provides otherwise (for example adverse possession has a longer period, while bill credits are much shorter).
In any case, financing is not expressly mentioned by the Civil Code and therefore expires in 10 years.
It is a rather long term, but given the particular calculation methods and the length of the payment period it is still possible that part of the installments will become statute barred.
read also Which payments become statute barred before 5 years? The list When does the limitation period for financing start? Financing, whether it is a loan or a mortgage, is based on the repayment of the debt in several installments.
The number of installments changes depending on various elements, including the sum of money received on loan, but there is no doubt that payments must be made in a deferred manner.
Therefore, each installment has a precise amount of money and a precise deadline by which the payment must be made.
Naturally, all deadlines are different, so it is not possible to calculate the loan requirement in an overall way.
In fact, when the prescription of an unpaid loan occurs, reference cannot be made to the overall amount of money owed to the credit institution, but rather each installment must be considered individually.
Each unpaid installment of the loan expires in 10 years, calculated from the date by which it should have been paid.
For this reason, it is possible that only some installments of the loan are prescribed, so that the overall amount is reduced.
read also 2023 mortgage installment prescription: after how long can the bank no longer demand payment of the installments Acts interrupting the prescription Only after 10 years from the payment deadline of the last installment can the entire loan be considered as prescribed, provided that in the meantime there have been no interrupting actions, i.e.: Requests for payment or warnings sent by registered letter with return receipt, certified e-mail or via bailiff; start of a lawsuit to obtain payment, therefore notification of the start of the judgment; express admission in writing by the debtor regarding the existence of the debt.
These events interrupt the statute of limitations, which starts again from scratch until completion, new interruptive acts or debt collection action.
To check the prescription of the loan it is therefore necessary to check the time elapsed since the expiry of each installment, as well as the presence of interrupting acts (and perform the calculation accordingly).
The distribution of the debt over a medium/long period means that only a few installments can be prescribed, but at the same time it significantly hinders the completion of the prescription.
It is extremely unlikely that the credit institution will not send formal reminders in time, also because there are precise rules on unpaid instalments, but it is worth checking.
read also What happens if I don't pay one or more installments of a loan?

Author: A.W.M.

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