Questions about debt limitation periods and the European Directive

Recently, a Spanish judge has raised a preliminary question as to whether he could assess the statute of limitations on a doubtful debt ex officio. This has raised doubts about the statute of limitations on debts under European Directive 2021/2167, as it could affect loans that have been overdue for years. The transposition of the Directive regulates the sale of doubtful debts from 29 December 2023 onwards. The draft bill currently being debated does not clarify this issue, and experts are analysing the possibilities. 

José Carlos González, partner in the insolvency and restructuring area, commented in Economist&Jurist: ‘It is a very well-researched preliminary ruling, which shows the Honourable Judge's extensive knowledge of comparative law, but which, in my humble opinion, has very little real practical application.’

Our expert adds on the statute of limitations: "However, this Directive is not, in the first place, a “consumer” Directive; and, on the other hand, Article 10 thereof does not establish any specific and clear individual right whose failure to transpose would be detrimental to individuals (consumers or otherwise). The issue of limitation periods is a matter of national law; the Directive neither enters into nor leaves it, so it is possible that the answer has to do with what is stated in said national legislation." 

He adds: ‘In our legal system, the statute of limitations must be invoked by the debtor as an exception, unlike expiry, which can be applied ex officio. And this is not changed by either the Directive or the draft law that will transpose it.’

Finally, our lawyer specialising in restructuring comments: "The issue of vulnerable creditors and their right of withdrawal is not covered by the Directive, nor does it have anything to do with the problem raised by the judge in his preliminary ruling. In short, Directive 2021/1967 does not impose a duty on the judge to automatically uphold the statute of limitations, nor on credit purchasers not to claim debts that may be time-barred or that could be understood, with professional diligence, to be time-barred."