What you should know before responding to old debt
Not being able to repay a debt is already stressful. It can leave you feeling out of control and worrying about how it might affect your ability to get credit in the future.
So, when the type of debt called prescribed debt comes up, many consumers often wonder: Can a debt collector still chase prescribed debt?
In many cases, the law offers more protection than people realise. The biggest risk is often not the old debt itself but accidentally restarting the debt prescription period.
But once you understand how debt prescription works in South Africa, you can respond calmly and protect your rights.
What is prescribed debt?
Under South African law, this type of debt is considered to be a credit payment you still owe that has become too old to be legally enforced.
Most consumer debt follows a three-year debt prescription period.
A debt may prescribe if during those years if:
- You didn’t make a payment
- You didn’t admit the debt
- The creditor didn’t take legal action
These rules form part of debt prescription in South Africa under the Prescription Act, which exists to prevent creditors from chasing very old debts indefinitely.
What’s important to know is if a debt has prescribed, the creditor cannot successfully enforce it in court.
Debt collectors and prescribed debt
But here’s the reality too. Even if a debt has prescribed, a debt collector for prescribed debt may still contact you.
This is where many consumers feel intimidated. Letters or phone calls can make it sound like legal action is about to happen.
However, remember that if the debt has prescribed, collectors cannot legally force you to pay it through the courts. They are also not allowed to mislead or pressure consumers into paying prescribed debt.
One helpful tip is that if you are unsure about the status of an account, ask the collector to provide proof of the debt and the account history.
Just don’t reset the clock on prescribed debt
Here is where many consumers accidentally make things worse. If you acknowledge the debt or make a payment, the debt prescription period can restart.
This means a debt that may have prescribed could become legally enforceable again. Before responding to a collector, first confirm:
- When the last payment was made
- Whether legal action has ever been taken
- Whether the debt is older than the three-year prescription period
What about prescribed debt on your credit report?
When it comes to prescribed debt being flagged on your credit report, consumers also worry that it means they will not qualify for credit permanently.
Financial Wellness companies like Finance365 are able to apply to creditor providers on your behalf to have the prescribed debt written off and removed from your credit report, ensuring it does not affect future credit applications.
Without skipping a beat, the truth is that checking your credit profile regularly helps you identify any debt-related issues early.
So don’t wait. Stay on top of your credit routine. It could mean one less heavy worry to carry.
Worry less when you know more
Debt problems can feel overwhelming, especially when collectors contact you about old accounts. With Finance365, you can check your information securely online, anytime, to see whether there is any prescribed debt flagged on your credit report.
Get your latest credit score and report for free any number of times in the year.
