Prescribed Debt: What South Africans Should Know

A letter arrives about a store account you stopped paying years ago. The amount has grown, and the collector wants payment now. Before you pay anything, find out whether the debt has prescribed. If it has, the law protects you.

What is happening

Under the Prescription Act, most ordinary debts, such as store cards, personal loans, cellphone contracts and credit cards, prescribe after three years. Prescription means the debt falls away and the creditor can no longer enforce it. The three years usually start from when the debt was due, often your last payment.

Prescription can be interrupted. If you acknowledge the debt, for example by making a payment or signing an acknowledgement of debt, or if you are served with a summons, the clock can restart. Some debts have longer periods: a court judgment debt, for instance, prescribes only after 30 years. Other debts, such as tax and some municipal debts, have their own rules.

The National Credit Act adds protection. Credit providers and collectors may not sell or try to collect a debt that has prescribed. A collector is also not allowed to trick you into restarting prescription. Some collectors ask for a 'small good-faith payment' on an old debt. Be careful: get advice before paying anything on a debt that could have prescribed.

Signs to notice

• A collector is chasing a debt you have not paid on for more than three years.
• You do not recognise the collector's company.
• You are being asked for a small payment to 'show good faith'.
• The amount has grown far beyond the original debt.
• You have not received any court papers about this debt.

30-second self-check

Answer yes or no.

• Is it more than three years since you last paid anything on this debt?
• Have you not signed any acknowledgement or payment arrangement in that time?
• Have you not been served with a summons for this debt?
• Is the debt a store card, personal loan, cellphone contract or credit card?
• Is the collector asking for a payment to 'reactivate' or 'settle' an old account?
• Are you unsure whether a court judgment exists for this debt?

0-1 yes: The debt may still be valid. Ask for a full statement and check your credit report.
2-3 yes: The debt might have prescribed. Do not pay or sign anything until you have checked the dates.
4 or more yes: There is a real chance this debt has prescribed. Write to the collector saying you believe it has prescribed, keep a copy, and get legal advice before any payment.

What you can do next

• Today: Do not pay or sign anything on the call. Ask for the collector's registration number and a full statement showing the date of your last payment.
• This week: Check your own records and your free credit report for the last payment date and any judgment.
• This month: If you believe the debt has prescribed, reply in writing stating that the debt has prescribed and may not be collected. Complain to the NCR or the Council for Debt Collectors if contact continues.

Your tool

Debt Prescription Self-Check - answer a few questions about dates and contact to see whether a debt may have prescribed, with sample wording for your reply to a collector.

When to get professional help

Speak to an attorney or Legal Aid SA if there is a summons or judgment, if dates are unclear, or if the collector keeps pushing. Old debts can bring back old shame and anxiety. Your EAP counsellor can help with that side while the legal side is sorted.
Who can help: Consumer attorney, Legal Aid SA, NCR-registered debt counsellor

Getting help in South Africa

The National Credit Regulator (ncr.org.za) handles complaints about collecting prescribed debt under the National Credit Act. The Council for Debt Collectors handles complaints about collectors' conduct. The Credit Ombud (creditombud.org.za) helps with credit record disputes. Legal Aid South Africa (legal-aid.co.za) and university law clinics may assist if you qualify.