The term "statute of limitations" is often equated with annulment. With respect to debt, it frequently give a feeling that the problem has disappeared. Meanwhile, it is a false impression and does not allow for erasing your credit history.
What is statute of limitations?
It is sometimes the case that some debtors underestimate old, unpaid liabilities. The reason for this is the impression that the debt is under the statute of limitations. This is however erroneous thinking as pursuant to the law a debt which is under the statute of limitations still exists. It can also make it more difficult or even prevent us from signing next credit agreements, using subscription services or making instalment purchases.
Then what is statute of limitations really? It is one of civil law institutions whose activities consist in the change of legal relationships due to the passage of time. This means that after the lapse of the statute of limitations, the credit has limited possibilities to use the assistance of courts when trying to recover the amount due to him. This is the case when the debtor successfully pleaded the statute of limitations before the court and the court accepted it. Only civil-law pecuniary claims can be under the statute of limitations.
The debt still exists
However, the statute of limitations does not mean that the debt disappears. The creditor may still claim it on an amicable basis (out of court). The creditor also has the right to enter the indebted person or company into the economic information bureau, known as the register of debtors. Such an entry means that we are shown in the register as a delinquent payer. Negative payment history may e.g. make it more difficult to take out a credit, loan, buy in instalments or enter into a subscription agreement.
In the interest of all of us
By avoiding to repay our liability, we also act contrary to the commonly applicable social rules. They stipulate that if we borrow money, we should pay them back, and if we use certain services (e.g. mobile telephony), we should pay for it. Compliance with the agreement is the foundation of social life and guarantees the safety of business trading for all of us. Let us imagine what would happen if a lot of people would refuse to pay outstanding liabilities, all at the same time. There would be a real market meltdown. It operates only on the basis of the mutual trust of the parties and keeping one’s word or the compliance with the concluded agreements.
It is easy to understand through a simple real life example: if we borrow money to our friends or neighbours, we expect to get it back. We are annoyed if the borrower delays the repayment or waits until we forget about the due amount. What does it feel like when the person who owes you money prolongs the moment of repayment and in the end tells you that they no longer have to give us the money back as the debt is under the statute of limitations... A similar situation occurs in the world of finance - says Karolina Barańska from KRUK Group. That is why, in the interest of everyone, the law stipulate that such a debt does not disappear but is transformed into a natural obligation. It is possible to demand its repayment even after the expiry of the statute of limitations and the only difference consists in the fact that there is no possibility to use the assistance of the court and bailiff.
That is why it is always a good idea to reach an agreement with the creditor and agree on the possible terms of repayment of the liability, e.g. in instalments. It will be beneficial to both parties - in time, we will repay our liabilities and “erase” our payment history and reputation, and the creditor will get his money back.