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It is not clear what happens to long-term loans
No one has the right to claim the money after this period.
Experts predict lawsuits between creditors and debtors
After 10 years of debates and discussions, the absolute prescription of some obligations is now a legislative fact. What is new in this amendment, defined as “the end of the perpetual debtor”, and how does it differ from the provisions of the Tax-Insurance and Procedural Code and other laws?
The new provision enters into force within 3 months of its promulgation in the Official State Gazette, which means that it will most likely be applicable in practice as of March 2021.
This text essentially introduced the so-called “absolute statute of limitations” for obligations in civil relations. With the changes adopted with expiration of the prescription period of 10 years
will be refunded
all accounts receivable
against
individuals,
without prejudice to the interruption of the limitation period, provided that it is not postponed or rescheduled.
The text applies to both new and existing debts. This means that after the expiration of the 10-year period, the debtors will not have any legal consequences for the fact that they have not paid their debt and their creditors will lose their money forever.
The provision of the text applies to debts with banks, credit companies and public services, as well as any other type of creditors, including other people, explain the lawyers.
Are provided
six
exceptions,
in which the statute of limitations will not apply. These are: for the commercial activity of individual traders or natural persons – partners of a company, who have decided to unite their activity, in case of inadmissible damage, unjust enrichment, for maintenance, remuneration and compensation under the Labor Code.
The grace period for the entry into force of the new texts has been reduced from 6 to 3 months.
The first limitation that lawyers pay attention to is that the 10-year term can be applied to all accounts receivable against individuals, from the state to municipalities, institutions, organizations and others. The precondition is that the deadline runs regardless of interruptions. For example, if it is agreed with the annexes to repay a loan in installments and it is serviced for a certain period, after which the debtor stops paying, then the day of the conclusion of the contract will be considered the beginning of the limitation period.
The absolute limitation cannot also apply to obligations.
So it is
accomplished
postponement or
reprogramming,
read the adopted text. The second restriction excludes the application of an absolute limitation period for the obligations of individual traders. However, if it is transferred to the sole owner as a natural person, this text could apply.
An important distinction to be made for the absolute statute of limitations is its separation from the statute of limitations. The Code of Fiscal Procedure and Social Security has introduced an absolute statute of limitations with respect to public responsibilities, most often taxes and contributions to social security.
They will be definitively reimbursed, without prejudice to the suspension or interruption of the statute of limitations, with the expiration of ten years as of January 1 of the following year.
However, various interpretations of the NRA, recognized by the courts, show that
refund
the prescription is not
absolute,
because the obligation remains collectible, even if the statute of limitations has expired. This means that if new facts and circumstances are collected or on another occasion, the state can reapply for a claim despite the 10-year period.
An exception is made to the statute of limitations for debts for which deferred or deferred amortization has been agreed, execution has been suspended at the request of the debtor or a complaint has been filed to resolve a controversial issue about the interpretation and application of payment agreements. double taxation or other international conventions. .
For the first time, a debt can be permanently canceled, without the creditor having the right after a time, if he discovers new facts or circumstances, to file claims against the debtor again. To cancel a debt forever, the debtor is not required to take any action other than the expiration of a period of time during which the counter-obligation has not been met.
The absolute prescription does not influence whether the debtor intentionally delays or for objective reasons the fulfillment of his obligation set forth in the corresponding contract. In that
the term of
the statute of limitations is running
Independently of
interruptions in
different
reasons
unless the obligation is deferred or rescheduled. This exception means that there is a desire and a common agreement between the debtor and the creditor. Creditors have no legal possibility to neutralize the deliberate wait for the statute of limitations, except to convince the debtor that for their future relationship it is better to cover the debt, for example, after rescheduling, than not to meet it.
A procedure for the cancellation of liabilities under the absolute statute of limitations has not yet been established. The lawyers predict that this will be done through statutes, in which the action of the creditor and the debtor will comply with the current procedure for filing a claim.
Today, private creditors rarely sue or take action against their debtors until they are convinced that voluntary enforcement is impossible. In addition, the procedure consists of establishing the claim with a claim in court proceedings. If, in the meantime, the debtor disposes of his property, such as selling part of it, then the so-called
a revocation claim, which is independent of the first, to the respective transaction or transactions. If there is no voluntary execution, once the claim becomes liquid, private creditors must organize and finance an execution process during which the statute of limitations does not stop.
The debtor can appeal the bailiff’s actions, as there are no restrictions on the number of complaints.
The absolute prescription will be executed in other cases in enforcement proceedings, for example
contesting
the claim of
third person
As it is common practice for legal proceedings to last for years, it is possible that the private creditor’s obligation lapses without the latter having to proceed with enforcement. Therefore, experts predict that there will be many lengthy lawsuits between creditors and debtors.
In practice, a case may arise in the case of obligations whose maturity by virtue of a contract or agreement exceeds the limitation period, such as debts of large amounts and long terms, for example in the case of mortgage loans. For the moment, before the bylaws are issued, it is clear that the debtor may be interested in suspending payments, which means their obligation to pay early, and then return it with the expiration of the absolute limitation period. Because in the absolute prescription the debtor has the opportunity to choose a certain obligation that he does not fulfill, justified or not.
This is one of the essentials
differences between
the absolute
prescription and
personal bankruptcy
If the individual files for bankruptcy, they will also invade property that is not subject to foreclosure, and alimony, which is quite different from so-called non-sequestration income, can also be determined and a trustee will be appointed to operate your property. In the case of absolute limitation, the obligation is simply canceled and cannot be collected compulsorily. In addition, personal bankruptcy has adverse consequences for the person who declared it, not only with regard to their property, which will be used to pay off their debts, but also through future restrictions.
For example, you cannot be a manager, partner, member of boards and boards of directors, attorney in companies, and your options for future loans will be limited, at least for a certain period of time.
Why the measure was proposed
Introduce an absolute statute of limitations of 10 years, upon maturity of which all accounts receivable against individuals will be refunded, regardless of the outage. Thus the proposal of the deputies of GERB and United Patriots was motivated.
In their reasons, the deputies of the ruling majority affirm that currently there are enforcement processes against citizens that last more than 10 years, and interest, fees and expenses are charged to the debtor at all times. In Bulgaria, there is no procedure to declare the insolvency of individuals and no absolute prescription of their obligations.
“There will be no need for expensive lawyers and legal services. After the expiration of the tenth year, the debtor, by sending a letter to the creditor and saying that the absolute statute of limitations of 10 years has expired and he owes nothing, the enforcement cases and any prosecution must end. This is very important, because we have another type of persecution, that of collectors “, thinks MEP Emil Radev.
“The enforcement proceedings can continue indefinitely, even if the debtor has lost a large part or all of his assets and is objectively unable to pay his debts. According to current legislation, upon the death of the debtor, the enforcement actions against his heirs continue ”, Reads the reasons.
“The absolute statute of limitations in the EU is regulated in the civil codes of Belgium, Germany, France, Portugal, Romania and others. The trend in most Member States has been to reduce the general statute of limitations in recent years. In most countries, a general limitation period is explicitly set, ranging from 3 years (eg Romania, Slovakia, Germany, Denmark, Czech Republic) to 30 years (Austria, Luxembourg and partly Belgium).
Why the measure was proposed
Introduce an absolute statute of limitations of 10 years, upon maturity of which all accounts receivable against individuals will be refunded, regardless of the outage. Thus the proposal of the deputies of GERB and United Patriots was motivated.
In their reasons, the deputies of the ruling majority affirm that currently there are enforcement processes against citizens that last more than 10 years, and interest, fees and expenses are charged to the debtor at all times. In Bulgaria, there is no procedure to declare the insolvency of individuals and no absolute prescription of their obligations.
“There will be no need for expensive lawyers and legal services. After the expiration of the tenth year, the debtor, by sending a letter to the creditor and saying that the absolute statute of limitations of 10 years has expired and he owes nothing, the enforcement cases and any prosecution must end. This is very important, because we have another type of persecution, that of collectors “, thinks MEP Emil Radev.
“The enforcement proceedings can continue indefinitely, even if the debtor has lost a large part or all of his assets and is objectively unable to pay his debts. According to current legislation, upon the death of the debtor, the enforcement actions against his heirs continue ”, Reads the reasons.
“The absolute statute of limitations in the EU is regulated in the civil codes of Belgium, Germany, France, Portugal, Romania and others. The trend in most Member States has been to reduce the general statute of limitations in recent years. In most countries, a general limitation period is explicitly set, ranging from 3 years (eg Romania, Slovakia, Germany, Denmark, Czech Republic) to 30 years (Austria, Luxembourg and partly Belgium).
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