5 questions everyone asks about prescribed debt
Maybe you got an SMS about a debt you haven’t thought about in over three years or a voice message. Leading you to ask, “Can it still be collected?”
In this article, we share the answers to five questions many people ask about these types of old debts that could possibly be classified as prescribed debt.
Q1: What does prescribed debt mean?
A debt becomes prescribed when a certain amount of time has passed, and the creditor has not taken legal action to collect it.
In many cases, this means the debt can no longer be legally enforced. This can include a debt you may have around your credit card, a personal loan or store account. Even medical accounts
Debt prescription in South Africa is governed by the Prescription Act. This Act sets legal time limits for how long a creditor must claim payment through the courts.
Q2: How long before debt becomes prescribed?
One of the most common questions is about the prescribed debt period. For many everyday debts, the period is three years.
Some debts have longer prescription periods. Home loans and court judgments, for example, can be enforceable for much longer.
Q3: How does a debt become prescribed?
For a debt to become prescribed, three things need to happen:
- No payments are made on the debt.
- The debt is not acknowledged by the consumer.
- No legal action is taken by the creditor.
If ALL these conditions apply for the full time period, the debt may become prescribed.
Q4: What cancels a prescription debt?
The clock can start running again if you:
- Sign documents acknowledging the debt
- Make a payment
- Admit that the debt is yours
Q5: What should I do if a debt collector contacts me?
First things first. Get your credit report to check what information is being reported.
If you believe the debt may be prescribed, ask for proof before admitting responsibility or making any payment.
If information relating to the debt looks wrong and you have not been asked for it in any way over three or more years, it could be classified as this type of debt by the Law.
You may also be able to remove prescribed debt from a credit report by disputing it with the credit bureau whose information appears on your report.
When it comes to prescribed debt in South Africa, the biggest mistake is assuming you have no options.
Before paying this type of debt, signing documents or agreeing that it is yours, take a few minutes to understand your rights and check the facts.
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