Indeed, the indefinite retention of personal data relating to credit behavior is prohibited in our Colombian legal system once the causes that justified its collection and administration have disappeared. This is in the words of the Constitutional Court of Colombia, in Judgment C-1011 of 2008, with Justice Jaime Córdoba Triviño as rapporteur.
In light of the legal vacuum that prevailed at the time, the Constitutional Court formulated a series of rules regarding the terms within which negative reports should be retained, taking into account criteria such as reasonableness, timeliness, and purpose. These rules were synthesized, in particular, in Judgments SU-082 and SU-089 of 1995. Ultimately, however, the Court urged the legislature to issue the corresponding regulations.
Thus, we have Article 13 of Law 1266 of 2008, as amended by Article 3 of Law 2157 of 2021, which sets out three scenarios to consider regarding the expiration of negative financial data, as follows:
- If, on the day you pay off or the obligation is extinguished, the delinquency was less than two (2) years, the period of negative reporting will be twice that period.
- If, on the day you pay off the obligation or it is extinguished, and the delinquency was more than two (2) years, the period of negative reporting will be a maximum of four (4) years.
- If you never pay off the delinquent obligation, the negative report will expire once a term of eight (8) years has elapsed, counted from the moment the obligation becomes delinquent; once this term is fulfilled, the data must be removed from the database.
However, it is common knowledge among Colombians that in October 2021, Law 2157 of 2021, popularly known as the “Clean Slate Law” (Ley de Borrón y Cuenta Nueva), came into effect. This law has modified the Habeas Data regime established in Law 1266 of 2008 and brings with it, among other things, transitional benefits for delinquent debtors who bring their obligations reported to credit bureaus up to date before or from October 29, 2021, until October 29, 2022. Specifically, regardless of the length of delinquency on the obligation, they will only have a negative report for a maximum of 6 months, as determined by Article 9 of the aforementioned law.
Below is an illustration of the transitional nature provided by the Clean Slate Law, with the maximum penalty of 6 months of reporting:
| SITUATION | RETENTION OF INFORMATION |
| Debtor with a negative report who fully pays off their obligation by October 29, 2022. | Maximum 6 months |
| If, as a negatively reported debtor, you meet one of the following criteria: Micro, small, or medium-sized enterprise (MiPyME); small agricultural or tourism producer; victim of the armed conflict in Colombia; young person and/or rural woman holding any type of agricultural credit with Finagro; natural person engaged in commercial or independent activities; and debtor or co-debtor with credit obligations with Icetex. | Immediate expiration. |
| If, as a debtor, an obligation was negatively reported during the health emergency, from March 12, 2020, to December 31, 2020, and you requested restructuring from the respective entity. | No information remains in Credit Bureaus. |
| If, as of October 29, 2021, the effective date of the Clean Slate Law, as a debtor you have an obligation that was negatively reported but has been extinguished because you already paid it off, and it has been in the databases for at least 6 months. | Immediate expiration |
| If, as of October 29, 2021, the effective date of the Clean Slate Law, as a debtor you have an obligation that was negatively reported but has been extinguished because you already paid it off, and it has been in the databases for less than 6 months. | The negative report will continue in Credit Bureaus for the time remaining to complete 6 months. |
| The negatively reported obligation has a delinquency of less than 6 months, and it is paid off while the Clean Slate Law is in effect. | It will remain for the same period as the delinquency, counted from the moment of extinction. |
That said, the benefit of the Clean Slate Law expires soon, so if you have delinquent obligations, do not miss out on this benefit. Let us remember the importance of a good credit rating in the financial sector.
If, after some time has passed since bringing the negatively reported debt up to date, it still appears, it is recommended to request the respective Credit Bureau to remove it from the databases, which has fifteen (15) days to respond. However, if such request is not addressed, a complaint may be filed with the Superintendency of Industry and Commerce (SIC), based on the fundamental right of every person to Habeas Data, or with the Financial Superintendency if the credit comes from a financial entity supervised by this oversight body; eventually, a tutela action (acción de tutela) may be filed.
Now, from the other angle: Creditor! It is important to keep in mind that there may come a time when the debtor indicates that the Credit Bureau is requesting the statute of limitations on the obligation to remove the negative financial data that has been reported at your direction. While the debtor may communicate this or initiate a process for that purpose, the creditor interested in the fulfillment of the obligation is not obligated to do so. This is because the statute of limitations must be asserted by the party so interested and declared judicially, insofar as Colombian civil and procedural regulations uphold the autonomy of private will, which entails the free disposition of the interested parties to assert or waive the statute of limitations at the appropriate procedural moments. And the obligation itself, as well as the reporting and delinquency status of the credit, is entirely different from the retention period in Credit Bureaus, since the term of retention of negative information, as an impact on the delinquent natural person, by way of sanction, has its respective guidelines, compiled in the most recent regulations on the matter, which is Law 2157 of 2021 – “whereby Statutory Law 1266 of 2008 is amended and supplemented, and general provisions on Habeas Data are issued in relation to financial, credit, commercial, services information, and information from third countries, and other provisions are issued”, which is not within the creditor’s competence.
To conclude, it is advisable to review the Financial Information Bureaus at reasonable intervals, on the one hand, to ensure that, in the event that an obligation has been delinquent, negatively reported, and finally paid off, the negative report has been removed from the credit history; or on the other hand, to verify that you indeed have negative and/or positive reports regarding obligations you know about and have incurred, because there is the possibility of identity theft.
We are fully available to explain in detail and clarify any doubts on this matter, as well as to provide legal support so that your financial behavior and history are appropriate, whether through renegotiating acquired debts, fulfilling these obligations within agreed timeframes, or filing requests, complaints, and even criminal charges; likewise, to implement strategies and legal avenues for any creditor with a full interest in enforcing and collecting a debt owed to them.
Valentina Martinez. – AZC CONSULTING ATTORNEY