Understand your rights and risks when dealing with old debt

Reading time: 4 minutes

Many consumers believe that if a debt is old enough, they just don’t have to pay it. It’s not that simple.

In South Africa, debt “prescription” or expiration is governed by the Prescription Act of South Africa. This Act dictates the time limits in which a creditor must claim a debt before it becomes legally unenforceable.

Broadly speaking these are:

• 30 years: Debts secured by mortgage bonds, judgment debts, taxation and debts owed to the State.
• 15 years: Debts owed to the State arising from loans or sales/leases of land.
• 6 years: Debts arising from a bill of exchange or other negotiable instrument (e.g. a cheque) or a notarial contract.
• 3 years: Most common debts, including credit card debt, personal loans, store accounts and services (like electricity or phone bills).

For example, you may suddenly receive a call or letter about a debt you don’t remember, or discover a debt you genuinely didn’t know existed because you were never contacted directly by the creditor.

If that happens, don’t assume you have to pay it immediately, and don’t try to navigate the legal process on your own. There are important risks to keep in mind, and Finance365 can step in to assess your debt and apply for prescription on your behalf.

Risk #1 

Making a payment before checking whether your debt has prescribed

For many everyday debts, the debt prescription period is three years. This often applies to personal loans, credit cards, store accounts and cell phone contracts.

But a debt does not automatically prescribe after three years. The prescription period only applies if you have not made a payment, admitted that you owe the debt or had legal action taken against you during that time.

For a moment, imagine a debt collector asks you to pay R100 as a gesture of good faith. If the debt has been prescribed, that small payment could restart the prescription period. This would mean the debt may once again become legally enforceable.

Response tip: If you suspect your debt might have prescribed, do not make any payments or sign anything. Let Finance365 review your account details and apply for prescription on your behalf to protect your legal position.

Risk #2 

Ignoring debt collectors or legal documents

Receiving a call or letter about an old debt can be stressful. Even then, ignoring it is rarely the best option.

Response tip: Instead of handling aggressive debt collectors yourself, reach out to Finance365. We can demand proof from the creditor—such as outstanding balances and last payment dates—and formally raise prescription on your behalf.

Remember never to ignore official court documents. If legal action has started, getting prompt professional advice is essential

Risk #3 

Assuming prescribed debt cannot affect your credit report

Prescribed debt doesn’t generally just disappear from your credit record.

Be sure to know if it’s there for a start by checking your credit score and downloading your free credit report from us at Finance365. It takes a minute or two and there’s no risk in this part of the process.

Then, if you believe your credit report includes prescribed debt information that should no longer appear, you don’t have to fight credit bureaus alone. Finance365 will handle the dispute process and apply for prescription removal on your behalf.

Pay attention to your credit report information & Let Finance365 resolve your prescribed debt

You don’t need to tackle old debt or legal terminology by yourself.

Whether you’re dealing with old collectors or proactively keeping track of your financial health, start by getting your free credit report through Finance365. If an old debt has expired, Finance365 will guide you through the process and apply for prescription on your behalf.

Finance365 gives you unlimited access to your latest credit report and your credit score so you can monitor your financial health and always see your full financial picture.