Prescribed Debt in South Africa Explained

Old debt that nobody has acted on for years can eventually expire in the eyes of the law. This is called prescribed debt. It can mean a creditor can no longer force you to pay and that the listing should come off your credit report. In practice, though, prescription is not automatic, and one careless phone call can undo it. Here is how prescribed debt works in South Africa.

What is prescribed debt?

Prescribed debt is a debt that has become unenforceable because the legal time limit for collecting it has passed. The rules come from the Prescription Act 68 of 1969, and for consumer credit they are backed up by the National Credit Act. Once a debt has prescribed, it is extinguished and the creditor can no longer enforce it.

How long before a debt prescribes?

For most consumer debts, the period is three years. That includes credit cards, store accounts, personal loans, overdrafts and vehicle finance. The clock starts on the date the debt became due and payable, not the date you opened the account.

Some debts follow a longer period. Judgment debts and mortgage bonds, for example, prescribe after 30 years. If a creditor has already obtained a judgment against you, the three-year rule no longer applies to that debt, and you may also face steps such as a garnishee order. Always confirm which period applies to your specific debt.

What restarts the clock?

Prescription can be interrupted, which means the period starts again from the beginning. The two main ways are:

• You acknowledge the debt. A payment, even a small one, a written or spoken admission that you owe it, or a settlement offer can all count as acknowledgement.
• The creditor serves a summons or other legal process on you.

This is why collectors sometimes ask for a token payment or for you to confirm your details. Once a debt has genuinely prescribed, the National Credit Act says it cannot be revived, but the safest approach is still not to pay, sign or admit anything before you have checked the facts. A voluntary payment on a prescribed debt can also be hard to get back.

What the National Credit Act says

Section 126B of the National Credit Act prohibits selling a prescribed debt and also bars collecting or reactivating it. The National Credit Regulator has also told credit bureaus to make sure that reported information does not include prescribed debt and to remove any such listing from a consumer’s record. In other words, a prescribed debt should not be on your credit report, and nobody should be chasing you for it.

How to check whether your debt has prescribed

1. Get your free credit report from each bureau. You are entitled to one a year, and our guide to the credit bureaus in South Africa shows you who holds your information.
2. Find the old account and note its date of last payment or last activity, and when it was handed over.
3. Ask yourself whether you have paid, acknowledged or promised to pay since then, and whether you ever received a summons or a judgment.
4. Gather proof: old statements, letters and emails. Keep them together.
5. If three years have passed with no payment, acknowledgement or legal action, the debt may have prescribed. Get advice to confirm before you act.

What to do if a collector demands payment

• Do not pay, promise to pay or confirm that the debt is yours.
• Ask the collector in writing for proof: the credit agreement, a statement of account, the date of default and evidence of any acknowledgement or legal action.
• State in writing that you believe the debt has prescribed and that you rely on section 126B.
• Keep every letter and SMS, and note the date and name of anyone who phones you.
• If the collector will not stop, complain to the National Credit Regulator or the Credit Ombud.

How to remove a prescribed debt from your credit report

Dispute the listing in writing with the credit provider and with each bureau that shows it. Attach your evidence and ask for written confirmation of removal. Bureaus are expected to investigate disputes within about 20 business days, and you should pull a fresh report after 30 days to check that the listing is gone everywhere. Our guide on how to clear your name from the credit bureau walks through the dispute process, and how long it takes to clear your name sets out realistic timelines.

Common myths about prescribed debt

• “It disappears by itself.” Not always. Old listings can linger and creditors or debt buyers may keep chasing, so you may need to dispute it.
• “All debt prescribes after three years.” No. Judgments and mortgage bonds run for 30 years.
• “Any payment restarts the clock.” A payment or acknowledgement before the debt prescribes restarts the clock, which is why you should be careful with any contact from collectors.
• “Prescribed means I never owed it.” You did owe it, but the creditor can no longer enforce it.

Getting help with prescribed debt

If you are unsure whether a debt has prescribed, or a collector is pressuring you, Credit Rehab’s credit clearance team can review your reports, test the dates and handle the disputes for you. It is also worth reading about adverse listings and your rights under the National Credit Act.

Get a free, confidential assessment

Think an old debt on your record has prescribed, or a collector will not let up? Credit Rehab will check the dates and show you your options, free and confidential. CONTACT US today to get started.

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