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Understanding cross-border debt collection limitation periods When do you need a lawyer to recover international debts?
Navigating the intricacies of debt collection can be challenging particularly when dealing with cross-border matters. For British nationals seeking to recover debts and enforce foreign judgments outside the UK, the process can be riddled with complexities. One key hurdle in such cases is understanding and adhering to the limitation periods applicable in different jurisdictions.
This guide will explore the limitation period for recovering debts, including how this may vary from country to country, and the importance of international debt collection lawyers.
Click on the links below to jump to that section:
Compare limitation periods for debt collection in different countries.
Find out how debtors can extend the limitation period for recovering cross-border debts.
Learn about the most effective strategies for enforcing a cross-border debts.
Discover the debt collection services that Giambrone & Partners provides.
Read common queries on debt collection limitation periods.
What is the deadline to initiate legal proceedings for debt collection?
If you are owed a debt that originated in a different country, it is important to understand the differing laws in countries. The standard protocol dictates that the debt collection procedure is handled in the country where the debt arose, unless there are jurisdiction clauses in the contract that dictate where any legal action must take place. This means abiding by international laws, including the limitation period for claiming an outstanding payment.
The statute of limitations refers to the period of time during which a creditor can legally pursue an outstanding debt before expiration.
The limitation period for recovering debts ranges from three to ten years, depending on the country. Most EU member states have a five year limitation period for claims that do not have specialised time limits. However, certain exceptions exist. Here are just a few examples of differing limitation periods for recovering debts:
France: Similar to other EU member states, France’s limitation period is five years for commercial debt or two years for debt owed by an individual. Find out more about French debt recovery here.
Italy: Although Italy is part of the European Union, Article 2946 of the Civil Code limits the period for debt recovery to ten years.
After leaving the European Union in 2020, the United Kingdom will have its own debt collection laws and limitation periods. The limitation period for starting the debt collection procedure in England and Wales and Northern Ireland is six years, five years for Scotland.
Limitation periods may also start from different points as well. This may include when the invoice is issued is due or when a claim arises.
To ensure you claim an outstanding debt within the time frame, seek legal advice from Giambrone & Partners’ expert debt collection lawyers. An experienced lawyer will guide you through the debt collection procedure and ensure that you have the correct information regarding how and where the claim will be processed.
To request a callback and speak with our debt collection lawyers, contact Giambrone & Partners today for more information.
Interrupting the limitation period
After the limitation period ends, the creditor cannot legally pursue the payment. To ensure the debt is paid, in certain countries, the limitation period can be interrupted in three ways:
Recognition by the debtor
Sending a written notice or a burofax (registered letter) confirming the outstanding invoice
A payment has been made towards the debt
Initiating legal action
These methods may vary, as certain countries’ limitation periods may only be interrupted legally or extrajudicially. However, in England and Wales, there is no possibility of extending the limitation period. Once six years have passed, the debt is written off and cannot be enforced by the creditor.
Ensure that any outstanding debts are pursued efficiently and within these time limits, particularly for larger debts. If your debt originated in a different country from your home country, seek the advice of an expert lawyer who will explain your options.
Instructing multi-lingual and multi-jurisdictional lawyers is the best option when recovering cross-border debts. They will be able to explain the different debt collection laws, providing you with clarity during the process. In countries where this period can be interrupted, debt collection lawyers will draft and send a formal LBA, as well as initiating legal proceedings if required.
Find out more about how Giambrone & Partners can help with cross-border disputes, including international debt recovery, here.
What are the best ways of enforcing a cross-border debt?
Cross-border debt collection has an added challenge as the multiple jurisdictions may have different procedures. This includes issues connected to where the debtor resides, where the creditor resides, and where the debt occurred. It is recommended that any steps you wish to take in connection with the recovery of the outstanding debt should be undertaken as soon as possible to ensure that the limitations period does not expire.
The default payment term in the UK is usually 30 days, with a maximum of 60 days. If informal reminders and notices for payment are ignored by the debtor after this time, creditors have the option of negotiated dispute resolution (“NDR”) or legal action through the courts.
Despite leaving the EU in 2020, the UK rejoined the Hague Convention, and English court orders will be recognised in most European countries. A County Court Judgment (CCJ) is a court order in England, Wales, and Northern Ireland that can be registered against a debtor who has failed to pay. In countries where the Hague Convention does not apply, enforcement will rely on the specific local debt collection laws of the country.
To enforce international debt collection, creditors will need the original judgment from the English court, any correspondence between parties involved, the debt’s specifications and proof of delivery of goods or services. If applicable, legalised translations of all documents should also be supplied.
Find out more about enforcing English court orders for cross-border debts with our expert guide here.
How Giambrone & Partners’ debt collection lawyers can help
For cross-border debts, differing laws and limitation periods for debt collection and should be properly understood. It is recommended that creditors should seek legal guidance as soon as possible to ensure complete clarity enabling a smoother process to improve the chances of avoiding court action.
Giambrone & Partners is an international law firm operating in various jurisdictions, our litigation lawyers will assist in successfully recovering debts, including using negotiated dispute resolution (NDR) such as mediation and arbitration. If this fails, our team of experienced lawyers will legally represent you in the court indicated in the jurisdiction clause or where the debt took place.
For more information on our debt collection services, debt advice, or to request a callback with our lawyers, contact Giambrone & Partners today.
Frequently asked questions
Can there be a court action after the debt recovery limitation period has passed?
Court action can only be undertaken within the limitation period, which is six years in the England and Wales and Northern Ireland. After this period, it becomes a “statute barred debt,” and while it still exists, it cannot be enforced, as outlined in the Limitation Act 1980.
To avoid a statute barred debt, seek legal advice as soon as it is apparent that the debtor will not pay the outstanding debt.
Learn more about the UK laws on debt collection with our expert guide here.