What is Prescribed Debt and How Can It Affect You in South Africa?

In South African law, the concept of prescribed debt is crucial for consumers to understand. Simply put, prescribed debt is debt that a creditor can no longer legally claim because a certain period has passed since the last activity on the account. Understanding what constitutes a prescription in law regarding debt can potentially save you from having to pay old debts. CDS Consulting SA provides a clear explanation of prescribed debt and how it might affect you.

The Prescription Act and Debt

The Prescription Act 68 of 1969 governs the prescription of debt in South Africa. According to this act, most types of debt prescribe (become legally unenforceable) after a period of three years from the date the debt became due or since the last payment or written acknowledgment of the debt by the debtor.

Key Factors Determining Prescription

Type of Debt

The prescription period can vary depending on the type of debt. For most general debts, the period is three years. However, there are exceptions. For example, a debt arising from a mortgage bond generally prescribes after 30 years.

Last Activity

The prescription period starts running from the last activity on the account. This could be a payment made by you, a written acknowledgment of the debt, or legal action taken by the creditor.

Interruption of Prescription

Certain actions can interrupt the prescription period and cause it to start running again from the beginning. These include:

• The debtor making a payment towards the debt.

• The debtor acknowledging liability for the debt in writing.

• The creditor serving a summons on the debtor for the recovery of the debt.

  
  

How Prescribed Debt Affects You

If a debt has prescribed, your creditor can no longer legally sue you to recover the money. You are not legally obligated to pay old debt that has prescribed. However, it's important to be aware of the following:

Creditors May Still Try to Collect

Even though a debt may be prescribed, creditors or debt collection agencies might still attempt to contact you and pressure you to pay. You have the right to inform them that the debt has prescribed and that you are not legally obligated to pay.

Acknowledging Prescribed Debt

Be cautious not to acknowledge liability for a prescribed debt or make any payment towards it. Doing so can revive the debt, and the prescription period will start running again from the date of the acknowledgment or payment.

Prescription is a Defense

Prescription is a legal defense that you must raise if a creditor takes legal action against you for a prescribed debt. The court will not automatically recognize that the debt has prescribed; you need to bring it to their attention.

Impact on Credit Record

Even if a debt has been prescribed and is legally unenforceable, it might still appear on your credit record for a certain period. It's essential to check your credit report regularly and dispute any inaccuracies, including listings of prescribed debt.

Understanding Your Rights

Understanding your rights regarding prescribed debt is vital. You should know that:

• You are not obligated to pay debts that have prescribed.

• Creditors may still contact you, but you can assert your rights.

• Acknowledging the debt can restart the prescription period.

  
  

Seeking Advice

Determining whether a debt has indeed prescribed can sometimes be complex. If you are unsure about the status of an old debt or are being pursued for a debt you believe has expired, it's wise to seek legal advice or consult with a registered debt counsellor like CDS Consulting SA. We can help you understand your rights and navigate the complexities of prescription in law. Don't let the pressure of old debt weigh you down – understand your rights regarding prescribed debt in South Africa.

Conclusion

In conclusion, understanding prescribed debt is essential for anyone dealing with financial obligations in South Africa. The Prescription Act provides a framework that protects consumers from old debts. By knowing the key factors that determine prescription and the implications of prescribed debt, you can better manage your financial situation. Always seek professional advice if you're unsure about your debts. Take control of your financial future today.

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