Ensuring the flow of receivables and protection of credit rights is essential for Brazilian and foreign lenders, insurers, investors, and companies doing business in Brazil, particularly in times of crisis.
For this reason, creditors often neglect an extremely important factor: the statute of limitations for credit recovery.
We list below a few of the most important:
(i) 6 months for judicial execution of bank checks;
(ii) 2 years for collection of bank checks, which start after the end of the 6 months of execution;
(iii) 3 years for judicial execution of other credit instruments (with shorter specific terms in some cases of endorsement);
(iv) 5 years for judicial execution of a public or private instrument (e.g. contract signed by 2 witnesses) or for collection of contracts without execution force;
(v) 5 years for the collection of credit instruments that can no longer be executed (fast track procedure), due to the lapse of the statute of limitations for enforcement action;
(vi) 10 years for other actions involving contractual liability.
Despite its relevance, the issue of statute of limitations under Brazilian law is complex. Our experience shows that foreign and domestic creditors must pay attention to the statute of limitations applicable to each type of collection, in order not to have their credit rights frustrated.