Prescripción de Deudas Bancarias y Cómo Evitar Embargos

If you have a bank debt and several years have passed without the bank taking legal action, you may be able to invoke debt prescription and avoid a seizure. Here, we explain how this mechanism works and what you can do to protect your assets.

What is debt prescription?

Prescription is a legal mechanism that states that if a creditor (bank, financial institution, etc.) does not initiate legal actions to collect a debt or does not legally notify the debtor within a certain period, the debtor can request its extinction.

When do bank debts expire?

In Chile, bank promissory notes expire in 1 year from their due date. If, within that time, the bank has not filed a lawsuit and has not legally notified the debtor, the debtor can request the prescription and have the debt extinguished.

Important: If the bank files a lawsuit before the expiration of the deadline but fails to notify the debtor within that same year, the prescription remains valid, and the debt may be canceled.

How to avoid a seizure for a prescribed debt?

If a bank or institution attempts to seize your assets for a debt that has already expired, you can:

1. Check your credit history: Consult the Commercial Bulletin or DICOM to verify the status of your debt.
2. Request prescription in court: File a prescription exception if the bank has filed a lawsuit past the deadline or has not legally notified you within the required period.
3. Do not acknowledge the debt: If you pay or agree to a new payment plan, the prescription period restarts.
4. Seek legal advice: A debt defense specialist can guide you through the legal process to avoid improper charges.

Conclusion

If you have a debt backed by a promissory note and more than 1 year has passed since its due date without the bank suing and legally notifying you, you may be protected by prescription and avoid seizures. At MTH Abogados, we help you review your case and defend you against unjust charges. Contact us and protect your assets!