Prescribed Debt - Debt Collection Laws in South Africa

Debt doesn’t last forever – a credit provider must claim payment within a certain period of time. If no payment is claimed debt eventually falls away, this is what we call prescribed debt.

In this article, our debt collectors in Port Elizabeth define when and how debt becomes prescribed, as well as if it will be noted in your credit record.

Additionally, we will discuss whether prescribed debt can be reactivated and what to do when a credit provider demands payment on debt that you thought was prescribed.

Prescribed Debt - Debt Collection in South Africa

Debt Collectors – What you need to know about Prescribed Debt

In most cases, credit providers have three years to claim payment. However, different types of debt have different prescription time periods attached to them – these are listed in the table below.

Once the three years has lapsed and you have received no demand for payment, no legal action has been initiated against you and no communication whatsoever has occurred – your debt becomes prescribed.

Essentially, this means that your debt is cancelled and the credit provider permanently loses their right to claim payment on the debt. However, this is on condition that your residential address and contact details remained the same during the prescription period and that the credit provider was informed of any changes.

Prescription does not apply if there is reasonable evidence that the credit provider tried to contact you during the prescription period.

This brings us to the next question.

Will prescribed debts still show on your credit report?

Once prescribed, debt must be written off and removed from your credit record.

If a prescribed debt is still reflecting on your credit record, you have two options:

  1. Contact the credit provider and request for the prescribed debt to be removed from your record.
  2. Contact major credit bureaus (Experian, XDS, CompuScan) directly and lodge a dispute request that the prescribed debt be removed from your credit profile.

The credit bureaus then has twenty business days to investigate your case. In the case where no evidence is found that the credit provider attempted to contact you during the prescribed period, the debt must be removed from your record once the twenty business days have lapsed.

Prescribed Debt Time Period

There are different prescription time periods for different types of debt. Below is a table listing the types and their prescribed time periods.

Type of Debt Time Period
Contractual debts 3 years
Cheque debts (any negotiable instruments) 6 years
Money owed to the State - Loan debt, land leased debt, land purchased debt  15 years
Mortgage bonds and tax-related debts 30 years

Prescription interruptions

If any of the following apply to you, prescription will not apply.

  • If you acknowledge the debt or make payment on the debt.
  • The credit provider takes legal action against you.
  • You live outside of South Africa.
  • You are business partners with, or married to, the credit provider.

Finally, this brings us to the last question.

What if a credit provider tries to collect on a prescribed debt?

Amendments to the National Credit Act (NCA) made in 2015 clearly state that it is unlawful for any credit provider or debt collector in South Africa to attempt to collect payment on prescribed debt.

Occasionally, credit providers sell their prescribed debts to debt collectors. The collection agency will then try contact you, demanding payment. This is illegal.

If someone if demanding payment from you on a prescribed debt, the following are options for you:

  1. Question the prescription as your defence. You are allowed to refuse to make payment until the debt collector provides evidence that the debt is not prescribed.
  2. If the debt collector persists, without providing evidence, contact a credit bureau.

Able Tracers and Debt Collectors South Africa

Contact us, for debt collection advice or assistance with your debt collection. We offer extensive knowledge on the entire debt collection process and legalities.

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