Any financial commitment entered into by a natural or legal person may be subject to a limitation period as referred to in the provisions of the Civil Code. What is the limitation period for a loan depends on who grants it and on what terms it was granted. Article 118 of the Civil Code describes this situation as follows:
“Unless a specific provision provides otherwise, the limitation period is ten years, and for claims for periodic benefits and claims related to business operations – three years”
Legal information about time barring for loans.
In the above article you can see a large discrepancy between the loan statute of limitations and the repayment deadline. In Poland, every financial institution grants a loan with a specific repayment date so that we know when we have to pay back our commitment. In such cases, the limitation period is only 3 years. However, it should be remembered that the statute of limitations is counted from the date of repayment and not taking out the loan. However, if we are talking about installment loans, in which the repayment date is extended to X periods , the limitation period is individual for each period. The situation is different in the case of loans granted by natural persons, e.g. a family member. In such circumstances, the term for claiming borrowed funds is 10 years. For the regulations to work in such situations, a document confirming the fact of concluding such a loan is necessary.
How to deal with an unreliable debtor [set of legal tools]
Financial institutions have specific procedures for collecting debts from debtors, which they use quite often. At the outset, it should be noted that no financial institution has legal force to enforce its debt (such ability is available to a bailiff). If the loan is not repaid, reminders are sent on time, and in the next stage the loan company has the right to use the services of a debt collector. The debt collector will claim our creditor’s rights and try to reach an agreement on paying the debt. In the next stage, there may even be a situation when a bailiff is summoned who will have the right to take over our assets as part of the repayment of the liability.
In the case of natural persons who granted loans, the rule of claim proceedings against the debtor looks the same as in loan companies.
The effects of having outstanding financial obligations
First of all, we are destroying our credit history and the chances of re-entering into a commitment in the future. All information held by the financial institution that grants us the loan will be forwarded to the Credit Information Bureau. BIK collects all data on delays in repayment of loans and advances and also carries out scoring, which is sent to banks. Scoring BIK largely decides whether we will receive the loan we need next time or not. This scoring is based on our credit history, timely repayment of installments, and the amount of financial obligations repaid.
In order to receive a financial liability in the future, you should then repair your scoring with timely repayment of loans on worse terms and, above all, settlement of old liabilities. Over time, scoring will increase and we will enjoy a very good credit history and better credit and loan conditions. To monitor the state of our credit history, we can buy a BIK report on our specific person.
Take care of your obligations
Try to repay all your liabilities regularly, so that in the future you will be able to get better credit and loan offers. Lower interest rates, longer repayment terms and higher amounts are rewards for being a reliable financial partner and receiving it requires us only to comply with the contracts we have signed. Make repayments within the time limit provided for in the contract, not sooner or later. Take a lot of small loans that will be quickly repaid.
Monitor your credit history if possible. If you haven’t done so far, buy a BIK report, which will give you insight into your credit history and at the same time will improve this situation.
Reduce your active commitments
Try to have no more than 2-3 active liabilities during repayment. Only after settling one obligation should you think about the next one, which will positively affect scoring in BIK . BIK not only takes into account whether we pay our liabilities regularly, but also whether we open more and more liabilities. If our tendency to take loans is increasing and the income does not run the risk of lack of liquidity and decline in BIK scoring. Let’s focus on short repayment terms, which will give us greater confidence in our ability to pay our liabilities.