Limitation

What it means

Limitation means that once the period runs out a court will not award the claim if the debtor pleads it. The debt does not vanish; it simply becomes unenforceable in court.

In commercial obligations the general period is four years. Some claims carry shorter periods, and claims already awarded by a court far longer ones.

Limitation must be told apart from preclusion, where the right itself ceases when the period ends and the court takes account of that even unprompted. Limitation works only if the debtor pleads it, so a debtor who voluntarily pays a time-barred debt cannot claim the money back. Both concepts exist in the Commercial Code and in the Civil Code.

How it works in practice

The period is interrupted by the debtor’s acknowledgment of debt or by filing a claim. A reminder alone does not stop the clock, useful as it is for evidence.

A time-barred receivable stays in the books until a decision is taken. Writing it off has its own tax conditions, and limitation is not one of them.

For claims against consumers and other non-traders the period is usually governed by the Civil Code and is shorter than the commercial one. When collecting, we therefore first establish which statute governs the relationship, and only then plan a payment order or another step.

What to watch out for

On debts pursued years later, limitation is the opponent’s first defence. So the periods are tracked in the sub-ledger rather than waiting for the debtor to get in touch.

Limitation of a receivable has nothing to do with the period in which the tax authority can assess tax. Companies sometimes think old documents are useless after four years, but tax periods run differently and document retention follows its own rules, which do not coincide with limitation.