The statute of limitations on debts is an important legal concept that determines the timeframe within which creditors can take legal action to recover outstanding debts. In Portugal, this period varies depending on the type of debt.

Debt Limitation Periods in Portugal

For commercial and consumer debts, the limitation periods depend on the debtor's status:

• Commercial debts between companies (B2B): 5 years

• Consumer debts (B2C): 2 years

It is important to note that agreements between parties to change the established limitation periods are invalid.

Once a debt reaches the end of its limitation period, the debtor can invoke the statute of limitations as a legal defence in court. This means that if the creditor initiates legal proceedings to recover the debt, the debtor can request the case to be dismissed due to the time limit being exceeded.

Does a Debt Disappear After the Limitation Period?

A common misconception is that a debt ceases to exist once it is time-barred. This is not true – a debt still exists even after the limitation period expires. The key difference is that the creditor loses the legal right to enforce repayment through the courts. However, the creditor may still request payment, negotiate settlements, or engage in amicable collection methods.

Debt Collection for Time-Barred Debts

Despite the statute of limitations, there are still lawful ways to collect time-barred debts. Some debt collection agencies specialise in recovering these debts through negotiation rather than legal action. The GLRD – Grupo Legal de Recuperação de Dívidas is an example of a company that undertakes the recovery of both active and time-barred debts. Their approach involves out-of-court settlements and alternative collection methods to help creditors recover funds that might otherwise be lost.

If you have unpaid debts and are uncertain about your options, consulting a professional debt recovery service like GLRD can provide solutions tailored to your situation.