Statute of Limitations for Debt Collection

General Term and the Commencement of Its Running

The general statute of limitations for debts is 3 years — this applies to debts on credits and loans, as well as to other types of outstanding liabilities. The countdown begins from the day when a person learned or should have learned of two facts in combination: the violation of their right and who the proper defendant is in a lawsuit for the protection of this right (Clause 1 of Article 200 of the Civil Code of the Russian Federation (CC RF)).

For example, if a borrower was supposed to make a payment on January 25, 2022, and failed to do so, then the statute of limitations begins to run on January 26, 2022, and ends on January 25, 2025, inclusive. At the same time, if the last day of the limitation period falls on a non-working day or a holiday, the last day of the period included in the statute of limitations will be the first working day after the weekend or holiday.

For debts with periodic payments (credits with a schedule, rent, housing and utility services, etc.), the limitation period is usually calculated separately for each missed payment. Thus, for credits and loans, the three-year period begins from the date of the first payment delinquency. The same principle applies to credit cards: the limitation period starts when the borrower fails to make the minimum mandatory payment within the established timeframe. If we are talking about an obligation with a one-time performance (for example, repayment of the entire debt amount by a certain date), then the running of the period begins on the day following the due date of the payment.

For claims on obligations, the statute of limitations commences upon the expiration of the performance period of the obligation — if it is determined, as well as from the day when the creditor presented a demand for the performance of the obligation — if the performance period is not determined or is determined by the moment of demand. If, at the same time, the debtor was granted a period to perform the demand, the statute of limitations begins at the end of this period. In particular, regarding claims on obligations, debts with periodic payments (credits with a schedule, rent, housing and utility services, etc.), the limitation period is usually calculated separately for each missed payment. Thus, for credits and loans, the three-year period begins from the date of the first payment delinquency. The same principle applies to credit cards: the limitation period starts when the borrower fails to make the minimum mandatory payment within the established timeframe. If we are talking about an obligation with a one-time performance (for example, repayment of the entire debt amount by a certain date), then the running of the period begins on the day following the due date of the payment.

Special mention should be made of cases where interest or penalties are accrued on the principal debt. According to Article 207 of the CC RF, with the expiration of the statute of limitations on the main claim, the statute of limitations on additional claims (interest, penalty, pledge, suretyship, etc.) is also considered expired, including those arising after the expiration of the statute of limitations on the main claim. Claims for the collection of interest and fines cannot have an independent limitation period calculated separately from the principal debt. For example, if a contract provides for the accrual of interest after the return date of the principal debt, the statute of limitations for such interest cannot continue to run after the expiration of the period for the principal amount.

A fairly common question is when the running of the statute of limitations begins in disputes where the defendants are the heirs of a deceased debtor. Often, such a period is mistakenly counted from the day of the debtor's death. However, the countdown of the period begins not from the moment of the decedent's death, but from the date when the debt was supposed to be returned. If monthly payments are overdue (for example, on a credit), then the limitation period must be calculated for each payment.

The running of the statute of limitations can begin, in particular:

• From the day when the execution of a void transaction began — for lawsuits on the application of the consequences of the invalidity of such a transaction and on recognizing it as invalid. If the lawsuit is brought by a person who is not a party to the void transaction, the period begins from the day when they learned or should have learned about the beginning of its execution (Clause 1 of Article 181 of the CC RF);

• From the day when the plaintiff learned or should have learned about the circumstances serving as the basis for recognizing a voidable transaction as invalid — for lawsuits on recognizing such a transaction as invalid and on applying the consequences of its invalidity. And if the transaction was committed under the influence of violence or threat, the period begins from the day of their cessation (Clause 2 of Article 181 of the CC RF);

• From the day of the auction — for lawsuits on recognizing them as invalid (Clause 1 of Article 449 of the CC RF);

• From the day of non-performance of the obligation to conclude the main contract in execution of the preliminary one (Clause 5 of Article 429 of the CC RF). Conducting negotiations, settling disagreements in order to conclude the main contract are not grounds for changing the moment from which this period begins to run (Clause 27 of the Resolution of the Plenum of the Supreme Court of the Russian Federation (SC RF) of December 25, 2018, No. 49);

• From the day of conclusion of the contract at organized trading — for recognizing such a contract as invalid (Part 7.2 of Article 18 of the Law on Organized Trading);

• From the day of the customer's declaration of defects in the work for which a warranty period has been established, if it is made within the warranty period — for lawsuits concerning the improper quality of such work (Clause 3 of Article 725 of the CC RF);

• From the moment of sale of the leasing item upon termination of the leasing contract on the claim for performance of the final obligation (Clause 23 of the Review of Judicial Practice in Disputes Related to Financial Lease (Leasing) Contracts (approved by the Presidium of the Supreme Court of the RF));

• From the moment determined in accordance with transport charters and codes — for claims arising from the carriage of cargo (Clause 3 of Article 797 of the CC RF);

• From the day of performance of the principal obligation on recourse obligations (Part 1 of Article 200 of the CC RF).

Separate attention should be paid to how courts interpret the commencement of the statute of limitations in cases involving the collection of an unearned advance payment. Thus, in the Ruling of the Supreme Court of the RF of August 4, 2022, No. 306-ES22-8161, it is explained that a refusal to perform a contract declared on a legal basis out of court by one of the parties should be considered as a method of demanding an unearned advance payment. Accordingly, the three-year statute of limitations for a lawsuit on the return of an unearned advance payment must be calculated according to the rules of Paragraph 2 of Clause 2 of Article 200 of the CC RF and is three years after the termination of the contract. Thus, the running of the statute of limitations began from the moment of the contract's termination.

Special Statutes of Limitations

There are also special (shortened or extended) statutes of limitations for certain categories of obligations:

Three months:

- For the transfer of the buyer's rights and obligations to a participant in shared ownership in case of violation of the pre-emptive right of purchase (Clause 3 of Article 250 of the CC RF);

Six months:

- For challenging a resolution of a meeting (but within the two-year period provided for by Clause 5 of Article 181.4 of the CC RF);

- For claims to compel the conclusion of a main contract in execution of a preliminary one (Clause 5 of Article 429 of the CC RF);

One year:

- For claims to recognize a voidable transaction as invalid and to apply the consequences of its invalidity (Clause 2 of Article 181 of the CC RF);

- For claims to recognize a mandatory procedure, a competitive procurement, or a contract concluded based on their results as invalid and to apply the consequences of their invalidity with reference to Article 17 of the Law on Protection of Competition. This period is calculated from the day of the conclusion of the contract; if it is not concluded — from the day of completion of the mandatory procedure or competitive procurement (Clause 1 of Article 449 of the CC RF, Clause 44 of the Resolution of the Plenum of the Supreme Court of the RF of March 4, 2021, No. 2).

The shortened period does not extend to claims challenging agreements that amend or terminate a contract concluded based on the results of a mandatory procedure or competitive procurement. The general statutes of limitations apply to such claims (Clause 44 of the Resolution of the Plenum of the Supreme Court of the RF of March 4, 2021, No. 2);

- For claims related to the improper quality of work performed under a work contract, except for claims regarding buildings and structures (Clause 1 of Article 725 of the CC RF);

- For claims arising from the carriage of cargo (Clause 3 of Article 797 of the CC RF);

- For claims arising from a freight forwarding contract (Article 13 of the Law on Freight Forwarding Activity).

Two years:

- For claims arising from a property insurance contract, except for an insurance contract for the risk of liability under obligations arising from damage to the life, health, or property of other persons (Clause 1 of Article 966 of the CC RF).

Ten years:

- For obligations where the performance period is not determined or is determined by the moment of demand, the statute of limitations cannot exceed 10 years from the day the obligation arose (Clause 2 of Article 200 of the CC RF).

Twenty years:

- Applied in relation to lawsuits for compensation of environmental damage caused as a result of violations of mandatory requirements (Clause 3 of Article 78 of the Law on Environmental Protection).

Suspension of the Limitation Period

The law provides for situations where the running of the statute of limitations is suspended for a certain period of time. Suspension means that the period is temporarily "frozen," and upon the cessation of special circumstances, it continues to be calculated further, extending the general limitation period by the duration of the pause. The grounds for suspension are listed in Article 202 of the CC RF. Such circumstances include, for example:

• Force majeure — an extraordinary and unavoidable event that prevents the creditor from filing a lawsuit;

• A moratorium on the performance of obligations established by the government — an official postponement of the fulfillment of debt claims (for example, in the case of a moratorium due to an emergency situation);

• Service of the plaintiff or defendant in the armed forces placed on martial law;

• Conclusion of a mediation agreement between the parties to the dispute;

• Suspension of the effect of the law regulating this obligation.

It is important that the suspension operates only if the specified circumstances arise in the last six months of the limitation period (if the period is longer than 6 months) or during the period (if it is less than six months).

In practice, the application of the concept of force majeure is almost unrealistic. For instance, the period of self-isolation during the coronavirus epidemic, which seemed to obviously constitute force majeure, was not recognized as such.

When special circumstances cease, the countdown of the period will continue from the point where it was stopped. An extension for a new three-year period does not occur during suspension — it is precisely the remaining part of the period that resumes.

Interruption of the Limitation Period (Commencement of a New Period)

An interruption of the statute of limitations means that the running of the period begins anew from zero. Unlike a suspension, where the period is simply extended, upon interruption following a specific event, a new full limitation period of the same duration is established. The grounds for interruption are listed in Article 203 of the CC RF. These include two key cases:

1. Performance of Actions by the Debtor That Indicate Acknowledgment of the Debt

A classic example is the partial repayment of a debt or other performance of an obligation. Any acknowledgment of a debt (including written confirmation of the debt, a response to a claim promising to pay, a request for restructuring, payment of interest, etc.) zeroes out the previous limitation period and triggers the countdown anew from the moment of such action by the debtor. Therefore, if the debtor made a partial payment, a new three-year period for the collection of the remaining amount begins to run from the date of the payment.

2. Filing of a Lawsuit by the Creditor in the Established Manner

The filing of a lawsuit by a creditor in court is in itself considered a factor that interrupts the limitation period. However, if the statement of claim is left by the court without consideration or the proceedings in the case are terminated, this may not yield the desired effect. In the general case, filing a lawsuit cuts off the running of the period, and after this event (if the case is not considered on the merits), the period begins to be calculated anew.

Consequences of the Expiration of the Limitation Period

First of all, the creditor does not lose the right to apply to court — a lawsuit can be filed even after the expiration of the limitation period. However, the debtor (the defendant in the case) receives the right to declare the expiration of the statute of limitations, and if they do so in a timely manner, the court will refuse to satisfy the lawsuit on the ground of the expiration of the period. Such a declaration can be submitted in a written objection to the lawsuit or orally during the court hearing; the court applies the limitation period only upon the application of a party — automatically, the judge is not entitled to deny a claim based on the statute of limitations without a motion from the defendant.

It is important that the objection regarding the expiration of the limitation period must be declared by each of the defendants separately if the collection is directed against several debtors jointly and severally. A statement by one debtor does not protect the others. If the defendant does not exercise their right and does not declare the statute of limitations, the court will consider the lawsuit on general grounds, despite the formally expired period.

From the perspective of substantive law, the expiration of the limitation period does not terminate the debt obligation itself. The debt continues to be recorded against the debtor. The creditor has the right to remind about the debt, demand payment out of court, assign the debt to collection agencies, etc. The only restriction is that neither the court nor the court bailiffs, upon the application of the creditor, will be able to compulsorily enforce such a claim if the debtor used the objection regarding the statute of limitations.

After the expiration of the limitation period, the creditor is also limited in certain unilateral actions. For example, it is unacceptable to debit a debt from the debtor's bank account or foreclose on pledged property out of court after the expiration of the limitation period. If the creditor, contrary to the law, carries out a unilateral debiting of money after the expiration of the period, the debtor has the right to recover these funds back through the court as unjust enrichment.

Separately, the consequences for guarantors and sureties under the debt should be taken into account. As a general rule, the limitation period for a claim against a surety is the same — 3 years from the moment when the creditor acquired the right to demand performance from the surety. If the principal debt is not repaid and the creditor can turn to the surety, the period is calculated from this moment. However, if the statute of limitations for the principal obligation has expired, this also terminates the obligation of the surety. In other words, the suretyship terminates when the creditor loses the right to collect from the principal debtor in court.

Reinstatement of the Statute of Limitations

For a physical person, in exceptional cases where the court recognizes the reason for missing the statute of limitations as valid due to circumstances related to the personality of the plaintiff (severe illness, helpless state, illiteracy, etc.), the violated right of the citizen is subject to protection. The reasons for missing the statute of limitations may be recognized as valid if they took place in the last six months of the limitation period, and if this period is equal to six months or less than six months — during the limitation period (Article 205 of the CC RF).

If a plaintiff that is a legal entity misses the statute of limitations, it will not be reinstated regardless of the reasons for missing it. This also applies to the claims of an individual entrepreneur that are related to the carrying out of entrepreneurial activity by them (Clause 8 of the Review of Judicial Practice of the Supreme Court of the RF No. 2 (2022), Clause 12 of the Resolution of the Plenum of the Supreme Court of the RF of September 29, 2015, No. 43).

Claims to Which the Statute of Limitations Does Not Apply

Civil legislation provides for exemptions when the statute of limitations does not apply at all (so-called non-property or "eternal" claims). The list of such cases is established in Article 208 of the CC RF. The main claims that do not have a statute of limitations include:

• Claims of depositors to a bank for the issuance of deposits;

• Claims for the protection of personal non-property rights and intangible benefits;

• Claims for compensation for damage caused to the life or health of a citizen;

• Other claims established by law — arising from family relations, except for cases where a period for the protection of a violated right is established by the Family Code; established by the Law "On Countering Terrorism"; "On the Use of Atomic Energy"; Federal Law of July 12, 1999, No. 162-FZ "On the Procedure for Transferring State Securities of the USSR and Certificates of the Savings Bank of the USSR into Target Debt Obligations of the Russian Federation";

• Claims of an owner to eliminate violations of their rights not related to deprivation of possession (negatory action). The Civil Code does not establish a statute of limitations precisely for claims to recognize ownership rights. Nor does it directly classify them as claims to which the statute of limitations does not apply. But based on the specific circumstances and grounds on which the claims are declared, the issue of applying the statute of limitations may be resolved differently. A claim to recognize the right of ownership to property that did not leave the possession of the plaintiff can be considered as a claim similar to a claim of an owner or other possessor to eliminate any violations of their rights. The statute of limitations, by virtue of Article 208 of the CC RF, does not apply to it (Resolutions of the Presidium of the Supreme Arbitration Court of the Russian Federation (SAC RF) of November 6, 2007, No. 8665/07, of September 21, 2010, No. 6436/09). But if the owner demands not only to recognize the right of ownership to the property but also to recover it from someone else's unlawful possession, the general three-year statute of limitations applies to such a claim.

The vast majority of claims for debt collection do not fall into this list. Monetary obligations arising from contracts, loans, services, supplies, credits, etc., are always limited by statutes of limitations.

Comparison of Key Aspects of the Statute of Limitations

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Practical Recommendations and Conclusions

In conclusion, we emphasize: the statute of limitations for debt collection is three years in the general case and is an important factor in the activities of organizations related to lending and settlements. If you are not sure about the correctness of calculating the limitation period or are faced with a disputed situation, it is better to consult a lawyer. A qualified specialist will help take into account all the subtleties of legislation and judicial practice to develop the right strategy for collecting a debt or defending against unjustified claims. Issues of the statute of limitations are quite complex, but their competent use will allow legal entities to effectively defend their interests and avoid unnecessary losses.