Information and services website for entrepreneurs

When debts become time-barred

Proper management of receivables allows you not only to identify arrears in payments, but also to control whether they are approaching the statute of limitations. You should take action to collect and possibly bring an action in good time so that you do not have a situation in which your claims are time-barred. You should also be aware that some debtors may consciously delay the payment process while waiting for the statute of limitations.

Limitation periods

According to the Civil Code, unless other regulations provide otherwise, the limitation period is 6 years, and for claims for periodical benefits (e.g. interest, instalments) and claims related to running a business is 3 years.

There are numerous exceptions to the principle in the Civil Code.

  • The statute of limitations expires two years for claims relating to, among other things, the sale within the seller's business, claims by craftsmen on this account and claims by farm managers on the sale of agricultural and forestry products.
  • The limitation period of two years shall also apply to claims for compensation for activities performed and for reimbursement of expenses incurred by persons who are engaged in activities of a given type on a permanent or business basis; the same shall apply to claims for advance payments granted to such persons.
  • After two years, claims for subsistence, nursing, upbringing or education shall become statute-barred if they relate to persons professionally engaged in such activities or to persons maintaining establishments for this purpose.
  • In the case of contracts for the provision of services which are not governed by other legislation, the limitation period will also be two years.
  • The statute of limitations for claims arising from the contract for a specific task shall also expire after two years. The period starts from the date of delivery of the work, and if the work has not been delivered - from the date on which, in accordance with the contract, it was to be delivered.
  • After a year, the statute of limitations applies, for example, to claims under the contract of carriage of passengers, goods and under the preliminary contract.

Interruption of the limitation period

The end of the limitation period shall be on the last day of a calendar year, unless the limitation period is less than two years.

The limitation period shall, with certain exceptions, begin on the day on which the claim becomes due. If the enforceability of the claim depends on the action taken by the right holder, the period begins on the day on which the claim would have become enforceable if the right holder had taken action as soon as possible.

Remember that in certain situations the limitation period may be interrupted. This is the case, for example, if the debtor has acknowledged his obligations in writing. The limitation period is also interrupted if the case is referred to the court.

The concept of mediation with the debtor is also another way of interrupting the limitation period. Moreover, according to the Civil Code, the period of limitation does not begin (and if it is already in progress, it is suspended) in the case of such claims, where the entitled person cannot assert them before a court or another authority due to force majeure.

According to the Civil Code, a claim confirmed by a final decision of a court or other authority, a decision of an arbitration court, a settlement concluded before a court or an arbitration court, a settlement concluded before a mediator and approved by the court, is time-barred after 10 years.

Was this page useful?