Do you have prescribed debt?

Prescribed debt is an old debt that has not been acknowledged by the consumer or creditor/collecting agent by means of communication to the consumer over a period of three years. More specifically, a debt is prescribed if:

  • You have not acknowledged the debt in the past three consecutive years, either in writing or verbally
  • You have not made a payment promised to make a payment to the outstanding debt amount
  • You have not been summoned to make a payment by a creditor for the debt within the past three consecutive years

What type of debt does prescription relate to?

These are examples of debt which can become prescribed if the correct rules are followed: for example:

  • Credit card accounts
  • Personal Loans / Pay day Loans
  • Account for gym
  • Cellphone accounts

Debt that does not prescribes in three years. A 30 year prescription period relates to; for example:

  • home loan
  • Monies owed to SARS

What does this mean for you as a consumer?

Everyone has to pay off their debt. It is to pay off debt owed. However, it is also unlawful for a debt collector or credit provider to demand payment three years after you have defaulted on the debt.

If your debt has prescribed;

It has not been paid for three or more years, a debt collector cannot ask you to pay off your debt and it is against the law if they do.

The National Credit Amendment Act, prohibits the sale and collection of prescribed debt.

Thus, you do not need to know about prescription and will not have to raise it as a defence in order to prevent you from having to pay for the debt.

Unless the debt collector or credit provider can prove that your debt is not prescribed. It is advised that you also put this in writing, so that there is a record of it.

If they persist, request the original loan agreement/contract, proof of  default, the outstanding amount and interest accrued. This should stop the debt collector from giving you a hard time.

If your debt has not prescribed;

It means:

  • You have acknowledged your outstanding debt within a period of three years
  • Have made a payment within three year

Which means your debt remains valid and you are accountable for paying it off.

If these affect me, who do I call or go to?

Contact info: 010 900 3064 or Send an email to chs@seedofprosperity.co.za

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