When entering into any commitment you have to reckon with the fact that you will have to pay it back. Non-bank loans due to their high granting and easy access are often abused by borrowers. Any late repayment involves the necessity of paying criminal interest, which directly contributes to the accumulation of debt. Instead of avoiding such a situation and trying available forms of assistance in repaying the liability, many people count on the expiry of a non-bank loan . What is it about and what conditions must be met to make it happen?
What is time limitation?
By signing the loan agreement , the customer undertakes to repay it on time. Failure to comply with the installment schedule results in the accrual of criminal interest, and then even to the initiation of bailiff proceedings to enforce arrears. There are, however, situations that the repayment deadline expires and the creditor has not requested repayment. The limitation period for the loan is therefore to evade the necessity to settle the debt, therefore the debtor is not obliged to meet the needs of creditors. However, for this to happen, specific legal conditions must be met.
How do you count the loan’s limitation period?
The lack of timely repayment does not mean that the debt has expired immediately. The limitation period must be observed , which defines after what time the creditor cannot enforce individual debts. This is governed by the provisions of law arising from the Civil Code, which specifies that the limitation period is three years from the date of the last day of the end of the loan period. These provisions only apply to banks and non-bank institutions. Limitation of a loan from a natural person occurs after a period of six years, which is why everything depends on the type of debt . In the case of situations not resulting from non-bank loans, the type of debt and the limitation period are as follows:
- Ticket for missing tickets – 1 year
- Overdraft – 2 years
- Unpaid invoice – 2 years
- Unpaid property tax – 3 years,
- Bank loan – 3 years
- ZUS (Social Insurance Institution) contributions – 5 years,
- Loan from a private person – 6 years.
Limitation of the debt is rare, as most creditors try to collect their debts earlier. It is also worth mentioning that the limitation period is interrupted if the creditor has requested repayment. He could do this by:
- attempting mediation,
- initiating bailiff proceedings,
- sending reminders
- filing a debt enforcement case.
Limitation of debt removes the debtor’s obligation to pay the debt, but in some cases this is not possible, such as in the case of a bank loan.
Limitation of a bank loan
All financial products offered by the bank, as well as non-bank loans, expire after 3 years. There is, however, a deviation from this rule and this is a mortgage. In this case, the waiver may apply only to interest after the limitation period has been reached. In the case of a mortgage secured by real estate, it may be auctioned when no further installments are paid. The funds obtained in this way are transferred to repay the loan, and the debtor loses all rights to the property.
Limitation of payday pay and the district court
There are times when creditors demand payment of debts once the debt has expired. To this end, they attempt to negotiate with the debtor and send letters about the intention to initiate recovery. Many people, fearing the legal consequences, undertake to pay their debts on the basis of a loan agreement that is time-barred. For this reason, they are obliged to settle additional interest, which accrued over several years may have grown to incredible proportions. In fact, after 3 years, the debtor is not required to pay back the debt. Even if the creditor has brought the case to court or bailiff, such an application will be dismissed because the claims are time-barred .
Consequences of the limitation period for a non-bank loan
Limitation periods are usually considered in the context of benefits for the debtor. He does not have to pay back the debt, which is often high. In this way, he may think he has received a free injection of cash. In fact, the expiration of a non-bank loan has negative consequences that can be severely felt in the future. First of all, it should be remembered that the expired debt still exists in the BIK databases as unpaid. This adversely affects your credit history and may cause difficulties in obtaining another loan, bank loan or purchase of installment equipment. It is worth remembering that you do not limit yourself to the possibility of using non-bank products when they are most needed.
How to get out of debt without limitation?
Instead of counting on limitation, which has unpleasant consequences, it is worth ensuring timely repayment. If the payment deadline is approaching and it is not possible due to the change in financial situation, you can negotiate the terms of the loan agreement with a non-bank company. Lenders never leave their clients in need and strive to help them pay their debts. In this situation, a non-banking company may offer:
- Refinancing – based on taking another loan, which will be used to pay off debts.
- Extension of the deadline – i.e. negotiating new repayment terms, adapted to the client’s financial capabilities and postponing the date of the next payment,
- Consolidation – consisting in combining all liabilities into one and establishing a new repayment schedule.
Limitation of debts may seem beneficial, but it negatively affects your credit standing. When applying for a non-bank loan , always adjust its amount to your financial capabilities so that it can be repaid on time. In the event of problems with its settlement, it is worth asking the lender who will propose the best solution to avoid the consequences of default.