When does a guarantor's debt become time-barred?

Question

José Manuel Alburquerque · Accepted Answer

Within the same time limit as the debt it guarantees, because the guarantee depends on that debt. In Catalonia the general time limit is ten years, counted from when the debt can be claimed. Periodic payments, such as the rent under a tenancy or the ordinary interest on a loan, become time-barred after three years. If the debtor's debt becomes time-barred, so does the guarantor's, even if the full time limit has not run as against the guarantor. Under the Spanish Civil Code (“Código civil”), which applies in most of the rest of Spain, the general time limit is five years. The time limits in Catalonia Guarantees are regulated by the Spanish Civil Code, but limitation of debts governed by Catalan law is regulated by the “Código Civil de Cataluña”, the Catalan Civil Code. This is normally the case for a loan or a tenancy signed in Catalonia by people who live here. Its time limits are as follows: Ten years as a general rule. In a loan case, the “Audiencia Provincial” of Barcelona, the provincial appeal court, has applied this time limit to the principal and the late-payment interest. Three years for payments made annually or at shorter intervals. The same court has applied it to the ordinary interest on the loan. It is also the time limit for each rent payment under a tenancy. The time limit starts when the debt can be claimed, for example when the loan falls due. If the bank called in the loan early because of missed payments, it is in principle counted from then. So, if a bank called in a loan on 15 March 2022 and no one has interrupted the time limit, in Catalonia it can claim the principal from the debtor and the guarantor until 15 March 2032. Under the Spanish Civil Code, which applies in most of the rest of Spain, the general five-year time limit, which also applies to periodic payments, would end on 15 March 2027. What makes the time limit start again The limitation period is interrupted, that is, the time limit starts again in full, by any of the following when directed at the guarantor personally: A written claim that leaves a record of the date and the content, such as a “burofax” (a certified letter with proof of content). A letter in which the creditor invites the guarantor to negotiate before going to court also counts, if it claims the debt from them. A court claim against them. The guarantor acknowledging the debt, for example by paying part of it or asking for a deferral. What the creditor does as regards the debtor is a more delicate matter. A claim against the debtor in principle also interrupts the time limit as against the guarantor. On the other hand, whether a burofax to the debtor or an acknowledgement of the debt by the debtor also affects the guarantor is a disputed question, which depends above all on whether the guarantor is jointly and severally liable. That is why it is unwise to treat the debt as time-barred without reviewing everything the creditor has sent to the debtor and the guarantor. If you are asked to pay an old debt Find out when the debt fell due or when the creditor called it in. Also ask the creditor for copies of what has been claimed since then from you and from the debtor. If the debt has been bought by a fund, the time limit does not start again because of the sale. The fund takes the bank's place with the same debt. Before paying anything or signing an acknowledgement of debt, check whether it has become time-barred. The court does not apply limitation on its own initiative. If you are served with a claim, you must raise it in your defence.