Today we will discuss the limitation of interest on loans and credits. An unregulated loan or late repayment imposes on the borrower the obligation to settle the interest charged by the bank. However, in the Polish legal system, all monetary obligations expire. Limitation is nothing else than the expiry date of the debt. When the limitation period expires, the debtor is released from the obligation to pay to his creditor.
In practice, despite the fact that the obligation (claim) has not expired, the creditor loses all legal possibilities to enforce the debt repayment from the debtor.
Limitation of claims
The Civil Code Act regulates various limitation periods for claims. Some obligations expire after six years of creditor’s inaction, others after three years, and others after a year.
In addition to the main claim, incidental claims, ie interest, are also subject to limitation.
As indicated by art. 118 of the Civil Code, unless a special provision provides otherwise, the limitation period is six years, and for claims for periodic benefits and claims related to running a business – three years. However, the limitation period shall end on the last day of the calendar year, unless the limitation period is less than two years.
Limitation of interest on loans and credits
It follows from the above cited provision that, as a rule, interest expires after three years – this will be the longest limitation period for interest. It should be added that interest may not be barred later than the main claim itself. The Supreme Court in a resolution of 26 January 2005 in the case examined under file III CZP 42/2004, indicated that the claim for payment for the sale of electricity will expire with a period of two years, because the service was sold as part of the entrepreneur’s activity. The invoice has not been paid on time. Interest accrued for delay.
If the creditor does not start debt collection in two years from the date of payment, his claim will be time-barred. At that time, interest will also be barred, despite the fact that pursuant to Art. 118, the limitation period for interest is three years. Therefore, if the main claim was time-barred – the interest claim on that liability also became time-barred, even though the general three-year limitation period for the interest on the main claim has not yet expired.
The same will happen for debts from the bank account, ie unregulated debit on the account. Interest will be barred here after the main claim has expired, ie after two years of the creditor’s inactivity.
Limitation of interest on a bank loan and private loan
A loan taken out at a loan company or bank expires after three years. The private loan, on the other hand, will expire only after six years from the date of repayment.
The limitation period for interest for both loans, however, will be the same and will be three years.
Limitation of interest awarded by the court
If the claim for payment of the loan / credit is confirmed by the court by a judgment or order for payment and its limitation period is automatically extended to six years, the limitation period for the claim for payment of interest will not change and will continue to be three years.
The above results from the provisions of art. 125 of the Civil Code, which reads as follows:
“A claim confirmed by a valid court decision or other body appointed to hear cases of a given type or an arbitral tribunal, as well as a claim confirmed by a settlement concluded before a court or arbitral tribunal or a settlement concluded before a mediator and approved by the court expires after six years. If the claim thus determined includes periodic benefits, the claim for future periodical benefit due shall expire after three years. “
Interruption of the limitation period for interest
The three-year limitation period for interest may be interrupted by the creditor. It is enough for the creditor to submit an application to the bailiff once every three years for the interest limitation period to start running again.
Interruption of the limitation period will also be due to any act:
- before a court or other body appointed to hear cases or enforce claims of a given type, or before an arbitration court, undertaken directly to investigate or determine or satisfy or secure a claim;
- by recognition of the claim by the person against whom the claim is entitled;
- by initiating mediation – yes, art. 123 of the Civil Code.
How to defend yourself against payment of outdated interest
The debtor does not have to pay prescription interest. In a situation where the creditor requests the payment of time-barred interest, the debtor may send him a letter requesting the cessation of further recovery. Unfortunately, quite often there is a situation when banks sell their receivables from unregulated loans and borrowings to debt collection companies that try to convince debtors in various ways to settle expired debts. It happens that the matter of expired debt goes to the bailiff.
The debtor has the chance to protect himself against the enforcement of time-barred interest and time-barred main receivables by filing an anti-enforcement action.