Are debt securities like time deposits

A debt security is a claim that a creditor holds on a debtor. Thus, a debt instrument denotes a receivable. Often, debt securities within the meaning of Section 371 of the German Civil Code (BGB) are referred to as debt securities. These bonds are securities. For the allocation of a certain amount, the investor receives a contractually agreed interest for the specified term. This interest rate is comparatively low compared to a regular loan. Investors, on the other hand, benefit from a relatively good return. Often these bonds are also referred to as bonds. In addition to corporate bonds, government bonds are also possible, in which case the creditor holds a debt against the state.

However, a debt instrument can also be a so-called enforcement title. This debt instrument is a deed that certifies the holder's claim. The main advantage of such a debt instrument, in addition to the possibility of enforcement, is the prevention of the statute of limitations. According to Section 195 BGB, claims usually expire after three years. In principle, however, a limitation period is only possible as of January 1st, so the actual limitation period is between three and four years. In special cases, the law also provides for longer or shorter limitation periods. In principle, there are ways to interrupt the statute of limitations, but the delivery of extrajudicial reminders is not sufficient for this. A limitation period, however, is suspended, for example, if the debtor acknowledges the debt or makes a partial payment. With a debt instrument, the obligee can extend the limitation period to 30 years. He can also use this title to enforce his claim with the help of a bailiff.

Obtaining an enforcement order is relatively easy. After the debtor has not responded to the extrajudicial reminders, the obligee must initiate a judicial dunning procedure. If the debtor pays his debts after initiating this procedure, the procedure ends. In the event of non-payment, it is important that the debtor objects to the claim within 14 days. If the debtor objects to the claim, the obligee can only take legal action. However, if the debtor does not react at all, he can apply to the court for an enforcement order. As soon as he has received this debt instrument, he can have his claim enforced.

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