Does a debt stalled in court expire? What prescrição intercorrente is

Yes. Under Brazilian law, a debt being collected in court can become time barred during the lawsuit, when the collection sits idle for years because the creditor could not find you or any of your assets to seize. This is called prescrição intercorrente (the statute of limitations running out in the middle of the lawsuit). When it is recognized, the enforcement proceeding ends and the creditor can no longer collect that debt in court, without you having to pay court costs or attorney’s fees for it (Brazilian Code of Civil Procedure, art. 921, § 5).

This applies both to debt with a bank or finance company and to taxes collected by the city, the state or the federal government. The rules change slightly in each case.

Debt with a bank, finance company or business

When the creditor files an enforcement proceeding (the collection lawsuit) and cannot find you or any assets to seize, the law says to count as follows (Brazilian Code of Civil Procedure, art. 921):

1. The period starts at the first unsuccessful attempt to find you or your assets, from the moment the creditor learns of it (art. 921, § 4).
2. The lawsuit can be suspended for up to 1 year, only once. During that year, the period does not run (art. 921, § 1 and § 4).
3. After that, the period starts running again. The length is the same time the creditor had to collect the debt (Summary 150 of the STF, Brazil’s Supreme Federal Court). For contract debt, such as a loan or financing, it is usually 5 years (Brazilian Civil Code, art. 206, § 5, I).

Taxes collected by the city, state or federal government

In a tax enforcement proceeding (execução fiscal, the collection of taxes in court), the rule is similar (Brazilian Law 6.830/80, art. 40):

1. If the government cannot find you or your assets, the lawsuit is suspended for 1 year and then archived.
2. From then on, 5 years run (Brazilian National Tax Code, art. 174, and Summary 314 of the STJ, Brazil’s Superior Court of Justice).
3. Once that period has passed, the judge can recognize the statute of limitations and end the collection, after hearing the government (Brazilian Law 6.830/80, art. 40, § 4).

The STJ has ruled that this count starts automatically, without depending on the judge ordering the lawsuit to be suspended or archived (Themes 566 to 571).

What interrupts the count

Interrupting means that the period starts counting again from zero. In the collection of ordinary debt, the law says this only happens with (Brazilian Code of Civil Procedure, art. 921, § 4-A):

• actual service of process (when you are officially summoned to the lawsuit);
• actual notification of the debtor;
• actual seizure (penhora) of an asset.

Important point: the creditor merely asking for a seizure is not enough. If they ask but nothing is found, the period keeps running. That is why lawsuits with many unsuccessful seizure requests may still be time barred.

In the collection of taxes, any act in which you acknowledge the debt also counts, such as asking for an installment plan or signing a debt confession (Brazilian National Tax Code, art. 174, sole paragraph). Agreeing to an installment plan for an old debt without knowing whether it is already time barred may mean giving up this defense.

An old debt is not always a time-barred debt

Having a lawsuit open for 10 or 15 years does not guarantee that the debt is time barred. It depends on the dates: when the first attempt to find assets took place, whether there was service of process, notification or seizure along the way, and whether the lawsuit was suspended. Each date has to be checked in the lawsuit.

What to do if you have an old enforcement proceeding

1. Do not pay or agree to an installment plan before checking. A payment or installment plan can hurt your defense.
2. Gather the case number and any papers you received: summons, notification, letter from the bank, notice from the city government.
3. Check the dates in the lawsuit. The statute of limitations can be raised before the judge through a simple petition, the exceção de pré-executividade (a defense that does not require a guarantee, for issues the judge can see without taking evidence).

If you have a collection lawsuit that has been stalled for years, send the case number and what you received on WhatsApp. Dr. Jin checks the dates and explains whether the statute of limitations can be raised in your case. Service Monday to Friday, 9 a.m. to 6 p.m., in Portuguese or Spanish.