Old Debt, New Chance: How the statute of limitations was suspended for 15 years

The District Court in Strakonice recently dealt with a case that fundamentally highlights the importance of proper timing of legal steps in debt collection. A case more than fifteen years old has taken on a new dimension, demonstrating how complex the assessment of statute of limitations can be in situations where arbitration proceedings, enforcement, and evolving case law intersect.

It all began in September 2008, when the defendant took out a consumer loan of CZK 150,000 from a bank. The interest rate was 23.38% per annum, and the loan was to be repaid in 71 monthly installments of CZK 3,919. However, by mid-2009, the debtor ran into problems. The bank sent him a demand for immediate repayment and accelerated the entire debt by July 10, 2009. The debtor only managed to pay a fraction of the principal – less than CZK 4,050.

The original creditor decided to use the arbitration clause contained in the contract. In May 2010, they filed a motion to initiate arbitration proceedings, and by August of the same year, they held a final arbitration award ordering the debtor to pay over CZK 194,000, including accessories. This was followed by enforcement proceedings ordered in April 2011. And then? Then the case virtually stalled for fourteen long years.

Why the debt did not expire due to the statute of limitations

Meanwhile, case law regarding arbitration clauses in consumer contracts changed. A landmark Supreme Court resolution from May 11, 2011, established clear rules for assessing their validity. Many debtors began to argue that arbitration awards issued based on invalid clauses could not serve as enforcement titles and that the limitation period had run continuously without interruption.

The defendant's guardian in this case also relied on this argument. He contended that the arbitration award was invalid and the entire claim was time-barred. Furthermore, he pointed out that the creditor did not file a lawsuit immediately after the enforcement was stayed.

However, the court rejected his objections. The key was the date the motion for arbitration was filed – May 2010, more than a year before the unifying decision of the Supreme Court. As the court emphasized, referencing a Constitutional Court decision, creditors who invoked an arbitration clause before May 11, 2011, acted during a period of constant changes in judicial practice. Therefore, they could not have foreseen that their procedure would later be deemed problematic.

Thus, according to the court, the limitation period stopped running in May 2010 and only resumed after the enforcement was stayed in August 2025. The creditor, moreover, filed the lawsuit just thirteen days after the decision to stay the enforcement was issued – which the court considered to be an action without undue delay.

Practical implications for creditors and debtors

This case illustrates several fundamental principles that every entrepreneur or business owner entering into credit relationships should know. Firstly, initiating arbitration or litigation suspends the statute of limitations. If a creditor actively pursues their claim through legitimate means, the limitation period does not run. Secondly, when assessing the legitimacy of a creditor's actions, the decisive factor is the moment the creditor took the relevant legal step, not when a decision was made about it or when it became legally binding.

For debtors, the case offers an important lesson: the mere passage of time does not necessarily mean the debt is extinguished. An active creditor who has properly asserted their claim may retain their right even after many years. In this case, seventeen years had passed since the loan was granted, and sixteen years since it was accelerated, yet the court recognized the creditor's claim in full, including default interest.

Ultimately, the defendant was obliged to pay not only the original principal exceeding CZK 145,000 and fees of CZK 2,200, but also contractual interest on the loan for the entire period and statutory default interest. In addition, there was an obligation to cover legal costs exceeding CZK 44,000. The total sum thus many times exceeded the originally borrowed amount.

The case also serves as a reminder that the assignment of a claim does not alter its character or its statute of limitations. Although the original creditor – a bank – assigned the claim to a specialized company in 2016, all legal effects of the previous steps remained preserved. The new creditor thus acquired all rights of the original creditor, including accrued interest.

For practical purposes, this leads to a clear recommendation: whether you are the creditor or the debtor, never underestimate the importance of legal advice regarding older claims. What might seem like a time-barred claim at first glance can be fully enforceable after thorough analysis. Conversely – a debt you consider long forgotten can suddenly resurface with full force, including years of accumulated interest.

Source: District Court in Strakonice, file no. 7 C 165/2025-49