Debt limitation period in Georgia: unpaid bank loans

The limitation period for a loan from a bank, a microfinance company or a private person in Georgia is, as a rule, 3 years (Civil Code, Article 129). When it expires, the debt does not simply disappear: the creditor can still sue you, and you have to tell the court that the period has passed. And a single small payment or acknowledging the debt starts the period again.

In short

When a debt becomes time-barred

The period starts on the day the creditor learned or should have learned that you did not pay (Article 130). If you paid the loan monthly, each instalment has its own 3-year period (Article 129). The exact date depends on the contract, the payment history and what the creditor is claiming.

The period cannot be changed by contract — the law forbids it (Article 146). And once the main debt is time-barred, the interest and penalties charged on it are time-barred too (Article 145).

What restarts the period, and what does not

• Acknowledging the debt: paying part of it or interest, giving a guarantee, signing a document that acknowledges it (Article 137)
• The creditor suing, applying to a court or a state body, or taking an enforcement step (Article 138)
• In these cases the time already passed no longer counts and the period starts again (Article 141)
• Starting private mediation pauses the period — that time is not counted. This applies only if the mediation started, or was still going on, in the last 6 months of the period. After it ends, the period runs on for up to 6 more months (Articles 132, 135 and 136)
• Selling the debt to a collector does not restart the period: the new creditor takes the claim in the same state, and you keep all your earlier defences (Articles 198 and 201)
• Calls and letters from the creditor are not among the grounds listed in the law — but your written reply may count as acknowledging the debt

What happens if you stop paying

1. Interest and penalties are added. The law limits them: while the loan is overdue, all interest, fees and penalties together must not exceed 1.5 times the remaining principal (Article 625).
2. The bank or microfinance company calls you, or passes the debt to a collector. Until you are told about the transfer, you may pay the original creditor (Article 200).
3. The creditor goes to court. If the contract was certified by a notary and you agreed in it to an enforcement writ, the notary can issue the writ without any court (Law on Notaries, Article 38).
4. You file your response to the claim within the deadline set by the court — no more than 14 days, or 21 days in complex cases. If you don't, without a good reason, the court issues a default judgment without a hearing (Civil Procedure Code, Articles 201 and 232¹).
5. Enforcement starts: you are entered in the debtors' register, the bank freezes your accounts, including new ones, and selling a flat or car is blocked (Law on Enforcement Proceedings, Articles 19¹–19³). A debtor of a secured claim (where the debt is secured by a mortgage or pledge) is not entered in the debtors' register, so these restrictions do not apply to them (Article 19¹).

Salary, pension and bank accounts

The enforcement officer can collect the money from your salary, pension, stipend and other income (Law on Enforcement Proceedings, Article 17). Protected from seizure are targeted state benefits and income below the subsistence minimum, as well as items you need for daily life and work (Article 45). A dispute over whether money is protected is decided by a court.

A debt confirmed by a court decision has a limitation period of 10 years (Civil Code, Article 142). Enforcement of a money claim ends if 10 years have passed since it started, and all seizures are lifted (Law on Enforcement Proceedings, Article 34).

The bank “wrote off” the loan — is the debt gone?

Not always. A bank often writes an overdue loan off its balance sheet, but that is its own internal accounting. A debt ends when the creditor forgives it — and forgiveness is an agreement between you and the creditor (Article 448). So a “written-off” debt can later be passed to a collector. If the bank says it forgives the debt, ask for that in writing.

If a bank or collector sues you years later

• Don't miss the response deadline — you must raise the time bar in court yourself; the court does not apply it on its own initiative
• Find out when you last paid and whether you have signed anything since — for example, a deferral or a new payment schedule
• Check the amount: principal, interest, penalties and fees separately
• If a default judgment has already been issued, you have 10 days from receiving it to challenge it (Civil Procedure Code, Article 237)
• Don't pay a “token” amount before checking — if you pay after the period has expired, you cannot get the money back (Article 144)

I'm on a “blacklist” — what does it mean?

There is no “blacklist” in law. Banks and microfinance organisations report loan data, including late payments, to the credit information bureau. When you apply for a new loan, the lender sees this history — which is why people with overdue debts are often refused.

• You can get your own credit history from the bureau free of charge at any time. The bureau may charge for an instant report through its online portal or app, but even there it must be free at least 3 times a year, within 1 working day. The report also shows who searched your data
• If a record is wrong — for example, you have already repaid the debt — file a complaint with the bureau, the National Bank or the Personal Data Protection Service and ask for it to be corrected or deleted
• A time-barred debt isn't removed from your history automatically — the limitation period only restricts a claim in court
• Be careful with loan offers “for blacklisted people”: if you are asked to pay a fee or any money before the loan, that is a sign of fraud

How we help

• We calculate the limitation period from your contract and payment history
• We check the amount, interest and penalties against the legal limits
• We represent you in court, raise the time bar and challenge a default judgment
• We negotiate with the bank, microfinance company or collector and help you get a seizure lifted

Time-barred loans in Georgia: limitation period and defence