Debt lapses after 5 years? Find out here
It is quite common in Brazil to find people who are in debt. Your financial backlogs stem from a number of reasons, ranging from a lack of personal organization to forgetting the due date of your debts. With regard to the first case, many wonder about the possibility of a time limit for collecting the outstanding amount – which is known as foreclosure debt.
Thinking about the various myths surrounding the subject of prescription, according to the Brazilian legal system, we list some clarifications about the debts falling. Be sure to check it out!
What does debt expire mean?
Debt is the term popularly used to refer to the prescription of a debt. It refers to the deadline, defined by legislative instruments, which the creditor holder has available to demand judicially the satisfaction of his credit.
It is interesting to clarify, in this sense, that the debt itself does not expire – what lapses is the right to demand it. Thus, after the legal deadline for debt collection is made, the company or financial institution loses the possibility of claiming the amount in question.
It is also worth mentioning that the time count to consider a debt that lapses begins from the date of default of the contract, ie from the first day after the due date.
So debt ceases to exist in 5 years?
Firstly, it is important to note that the terms vary according to the nature of each debt. In general, the Civil Code defines, in section 205 of section IV, that the prescription will occur in 10 years if the law does not establish a different condition.
The claim for collection of net debts in a public or private instrument.
This includes expenses with overdrafts, bank slips and credit cards, for example. The article also addresses the food benefits, which prescribe in 2 years, the claims related to rents of rustic or urban buildings, whose term is 3 years, and many other specificities.
Is it worth waiting for the debt to expire?
The practice of waiting for debt to expire has no advantage for the consumer – unlike many believe. In fact, it tracks numerous financial risks and is therefore not recommended.
This is because, until the debt expires, the customer will be registered as negative in the Credit Protection Service (SPC) and Bank Service Centralization.
As such, it will be severely restricted in the market and may find it difficult to access credit and finance. After all, the financial institution will be aware of the default consumer state.
This whole context can be aggravated if the individual comes across emergency situations in which they depend on the release of benefits. Another risk incurred by the debtor concerns interest and the updated collection of the amount due, as these may be claimed from legal proceedings.
How to renegotiate debts and organize my finances?
Given the risks of defaulting on the debtor, it is ideal that all outstanding issues be settled within the due dates. When this is not possible, or when debt is already set up, you will need to look for ways to renegotiate it to regain financial stability. Here are some valuable tips!
Financial situation analysis
In order to start the financial reorganization through debt settlement you need to analyze your own economic situation. In this regard, it is worth listing all late payments, noting the monthly inflows and outflows, and reviewing the household budget.
In this way, it will be possible to readjust personal finances and evaluate revenues and savings to find out the monthly amount that can be used to pay outstanding amounts.
Accomplishment of the planning
For the organization of finances to be satisfactory, it is important that the debtor make short, medium and long term planning. As a result, in addition to planning for debt repayments, you can project a safer and more stable financial future.
The idea is that over the years, it will be possible to rely on emergency savings and applications that ensure timely payments, no longer having to spend energy to pay off debt.
Subsequently, a proposal should be made that is beneficial to both the creditor and the debtor. At this stage, you need to study payment or install possibilities, based on your financial reality, to propose to the credit holder.
In this regard, it is important to prepare at least two negotiation alternatives that are consistent with the identified economic capacity and can be fully met. After all, there is no point in assuming an obligation that cannot be met.
Negotiation with the lender
After outlining advantageous proposals, you need to contact the lender to verify the possibilities of debt renegotiation. Dialogue with the person in charge until you find a value that is accepted by both parties.
Institutions in general are often flexible with respect to the agreements proposed by the debtor. Some of them even allow this negotiation to be done through the organization’s own page.
In addition to this opportunity, the client may also count on negotiation efforts with the credit protection agencies. The main financial institutions in the country usually attend these events, in person and virtually.
Achieving financial independence is a dream of many. The goal, however, can only be achieved through a solid action plan that replaces outstanding debt with investments and investments.
The first step is therefore the deconstitution of the condition of debtor. Hence the importance of reorganizing the monthly budget, renegotiating debts to get out of the red and eliminating expiring debt.
And then? Did you like our content? Take the time to complement your reading and find out how to plan your family’s financial future!
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