Agate Loan and Prescription: Important Information

Questioner

In response to a question about an Aunt Agatha loan that was put to you on May 15, you indicated in your answer that the Agatha loan may expire. What do you mean by this and when can this occur? I would also like to ask you whether an Agaath loan always remains subordinated, even if the loan agreement states that the loan will remain subordinated until 2008 at the latest.

Lawyer

I don't know the question. And I don't know who answered it. But the enforceability of a loan or other claim can always expire. In principle, it expires after 5 years, unless the prescription has been interrupted.

Lawyer

The tax authorities will not simply accept the conversion of the loan, because you will then have enjoyed an undue tax benefit.

Lawyer

The loan is subordinated for at least the first 8 years. If the 8-year term expires in 2008, it may be agreed that the loan is no longer subordinated. Whether the loan has expired depends on what exactly was agreed about repaying the loan and if those agreements were not met, what happened afterwards. If you should have repaid and the person who provided the loan did nothing to obtain payment, the amount owed will expire after 5 years.