Debt prescription exists so that people do not have eternal bonds based on debt and financial obligations. After the prescription of debt, the creditor loses the legal recourse to obtain debt repayment, often having to rely on the debtor’s “good faith” to repay the debt.
The prescription, in law, means the loss of time for the exercise of the right of action. Therefore, the prescription of debt is precisely the delay in relation to the appeal to get the debt payment and the loss of the legal right to charge it.
How long does debt expire (debt is prescribed)?
Falling debts are those that have expired, so those in which the deadline has already been exceeded. When the debt lapses, the name of the consumer debtor comes out of negative entries, such as SPC and Golden Pocket Bank.
However, there are different types of debts and each has its time to prescribe defined by the civil code.
- one year: claiming to charge hosting expenses or insurer charge from insurer;
- In two years: alimony-related debts;
- In three years: debts resulting from rents;
- In five years: tax-related debts, credit cards, medical insurance, school debts, financing; are the debts related to agreement between the parties;
- In ten years: the remaining debts, which have no pre-established term, will be subject to this maximum term. In this period, debt such as water, electricity, telephone, gas.
It is important to remember that while the debt is being judged, the term will be lengthened for how long the action lasts.
How long does the name get dirty?
The name can only be dirty in agencies such as SPC and Golden Pocket Bank, until the time of debt prescription. When the debt lapses, the name of the consumer debtor should leave the negative record. When your name comes off the SPC and Golden Pocket Bank lists, the debt stops impacting your score, so if you don’t have any other debt, you get the “clean name” again.
Debt will no longer be available to other companies and financial institutions that could no longer view their debt. But in fact, even with the prescription of debt, the pending will still be open. That is the institution to whom you owe will still have on your records, your debt. This can disrupt your future relationship with the company, or even with others nearby.
However, even with their debt still on their records, after rewriting bank debt or any other type, there is the legal ways to turn business. If the company continues to charge, the consumer must contact PROCON and file a lawsuit demanding compensation for moral damages.
The best, indeed, to be done, even with the expiring debt, is to negotiate the debt with the financial institution or company. You can get a great discount on the deal, and end your pending entirely.
The Debt Prescription It was a resource designed to shorten debt relationships between individuals and institutions. More financial education content?