Most everyone, whether in debt or not, must have heard that they expire after a certain period of time, ceasing to exist and clearing out who was in default – which is called forfeiting. But what happens in practice when a debt lapses?
Answering this question involves understanding how cartoons occur in the country. Therefore, this post provides the necessary explanations in this regard and clarifies whether or not it is worth letting a debt expire. Good reading!
What do you mean when a debt lapses?
Once a company finds that a customer has debts, a collection path is taken in the expectation that the debt will be recovered as quickly as possible.
Initially, the defaulting party receives notices (whether by telephone, correspondence, or text messages) and may have his or her name included in credit protection services. This happens in terms that vary according to the creditor’s company billing policy. Anyway with the dirty name getting any kind of credit gets a lot more complicated.
After insisting for a while, it is common for lenders to give up collecting and repaying the debt to companies that specialize in this type of service. Even so, after a while, given the lack of prospects of getting the money back, even these charges are interrupted, the costs of maintaining this activity are often greater than the debt.
Thus, after 5 years, the debt expires. However, what for many is a relief should be viewed carefully. This stage only means that the debts will no longer appear on the credit protection service lists, meaning that the debtor will no longer appear with the dirty name and can theoretically enjoy the benefits of it.
However, even after expiration, a debt can still be collected by the company entitled to the arrears. And this can be done even through judicial means.
What is the difference between prescribing and expiring?
A debt can no longer be charged only when it prescribes, that is, when a company fails to repay it for a long time. Thus, expiring and prescribing cannot be used as synonyms.
The term for the prescription of a debt varies according to the nature of the debt. According to Article 205 of the Civil Code , some debts (such as lodging and insurance ) expire in just 1 year. From 2 years, prescribe debts generated by non-payment of child support and, in 3, those corresponding from rents.
Most bank debts expire in 5 years, and all other debts with no set deadline are only reached by prescription after 10 years without charges. This period is stopped counting if any billing action is taken. And once the company enters into court, the prescription is no longer considered while the action lasts.
Is it worth letting the debt expire?
Definitely not. Letting a debt expire is not the best way to get rid of it. Besides not preventing her from being charged at any time, imagine having to wait so long to see her name off the debtor lists? Not to mention the interest and penalties that can continue to be calculated, increasing the amount due.
The best solution for those in debt is to propose a negotiation with the creditor company. So, contact her and state her situation. Through a conversation, it will certainly be easier to find a reasonable way out for both parties. However, be sure to do your homework by reorganizing your budget and cutting unnecessary spending.
As you have seen, a debt lapses after 5 years, but that does not mean that the debtor will be free of it after that. So get organized to pay everything on time.
Was this post useful to you? Enjoy it here and learn how to pay off your debts and start accumulating money .