Statute of limitations on debts in Spain

We are convinced that if you have come this far, it is because you are interested in knowing how the debt prescription system works in Spain, which is regulated by the Civil Code. That is normal. After all, it is a legal issue of vital importance for both creditors and debtors. That is why we want to dedicate this article to it. Pay attention.

First of all: what is meant by debt limitation?

Debt limitation is a legal mechanism whereby, after a certain amount of time has elapsed, a creditor no longer has the right to legally demand payment of a debt from a debtor. In other words, a natural or legal person who lent money or other goods to another person no longer has the right to legally claim it, and is therefore exempt from payment. Debt limitation is regulated in the Civil Code in articles 1961 to 1975.

Requirements for a debt to become time-barred

Determining the limitation period for debts in our country is not as simple as it might seem. According to the Civil Code, a series of requirements must be met for this to happen. Let's take a look at them:

• The debt must be subject to limitation, i.e. it must be subject to a limitation period. According to Article 1965 of the Civil Code, this does not apply to the division of inheritances between co-heirs, the demarcation of adjoining properties, the division of common property between co-owners and private debts that have been recorded in a public deed.
• The creditor must have allowed sufficient time to pass without taking any action to collect the debt. According to the reform of civil legislation implemented by Law 42/2015, debts without a specific term are subject to a limitation period of 5 years. However, if they are of a special nature, they may have a shorter or longer term.
• Debt limitations are not declared ex officio. By this we mean that, in order for it to be considered as such, the debtor is obliged to initiate proceedings for this purpose. In this regard, do not confuse limitation with expiry, as the latter can be declared ex officio.

So, when does a debt expire?

Now that we have clarified the requirements, confirmed that debts do indeed expire, and specified that the general term is five years, it is time to delve deeper into this issue. The reason for this is that the origin of the debt can significantly affect the expiry terms.

Statute of limitations on personal debts

This would be the case, for example, of a debt arising from a personal loan, i.e. without mortgage guarantee. Unless a different term is specified in the contract, the debt will be considered time-barred five years after the creditor could have demanded payment but did not do so.

However, some autonomous communities have the power to change this limitation period. For example, the Civil Code of Catalonia raises the general limitation period for debts to 10 years, making it more stringent than the common Spanish framework.

Statute of limitations on commercial debts

Here we are referring to debts documented by promissory notes or bills of exchange that arise between two companies for the sale of goods or the provision of a service. In this case, the period of time that must elapse for the debt to become time-barred is three years.

Statute of limitations on tax debts

Specifically, we are referring to debts you may have incurred with the Social Security or the Tax Agency. For example, if you are a self-employed worker who, due to a run of bad luck, has been unable to pay your contributions and income tax and VAT returns regularly.

In these cases, the limitation period is halfway between the two previous cases and is set at four years. However, there is a notable difference between them: the limitation period for tax debts can be applied ex officio, i.e. without the debtor having to invoke it.

Statute of limitations for administrative penalties

For example, traffic fines or fines for committing certain anti-social acts, such as urinating in the street. To determine the statute of limitations for this type of debt, it is necessary to know the severity of the action:

• Minor offences: 1 year.
• Serious offences: 2 years.
• Very serious offences: 3 years

The limitation period for offences begins from the moment the offence was committed or, failing that, when the offending conduct was detected by a competent authority with the power to impose a penalty. However, in the case of a penalty, it will begin when the decision imposing it can be enforced.

Statute of limitations on mortgage debts

Here, you must take into account not only the Civil Code, but also the Mortgage Law, which in Article 128 establishes a statute of limitations of 20 years, which begins to run from the moment the default occurs.

Prescription of specific debts

Firstly, it is necessary to understand what the Civil Code defines as specific debts. Specifically, it refers to:

• Fees, expenses, disbursements and rights of judges, solicitors, notaries, experts, registry officials and any other professionals related to legal matters.
• Pharmaceutical services for medicines.
• Food and accommodation expenses in restaurants and hotels, for example.
• Wages, supplies and expenses for workers.

In all these cases, the debt becomes time-barred after 3 years. The only exception is for debts arising from the repair of damage caused as a result of non-contractual liability, in which case the period is reduced to 1 year.

How is the limitation period interrupted?

The limitation period is automatically interrupted when the creditor legally claims the debt or, failing that, when the debtor expressly acknowledges it. This act means that the period restarts, i.e. it begins again from the beginning.

However, the debt cannot be claimed in just any way. The creditor must claim it from the debtor through a legal action or conciliation. They can also make an out-of-court claim in writing by any means that provides reliable proof of their intention to collect, such as a registered letter with acknowledgement of receipt. This serves to restart the limitation period, but to guarantee collection, it is always best to resort to legal action.

We hope this has clarified all your questions about the statute of limitations on debts in Spain. However, if you still have any questions, want to claim a debt or have had a claim made against you and need legal advice and defence, please contact us. Our team of lawyers will take care of your rights and interests.