Prescribed debt

In South Africa, prescribed debts are debts not paid or acknowledged by the debtor for at least three years. Once a debt has been prescribed, it cannot be legally enforced or collected by the creditor. The Prescription Act specifies the time limits for prescription of different types of debt. Credit card debt, personal loans, and retail accounts, for example, generally prescribe after three years of non-payment or acknowledgement, while mortgage bonds and other long-term debts usually prescribe after 30 years. It’s important to note, however that while prescribed debt cannot be legally enforced, it does not necessarily mean that the debt is forgiven or cancelled. The debt may still appear on credit reports, and creditors may attempt to collect the debt informally.

For this reason, if not dealt with, prescribed debt can still affect a person’s life even though it is not legally enforceable.  In some cases, creditors may still attempt to take legal action to collect on prescribed debt. If a debtor is sued for a prescribed debt, they may have to defend themselves in court, which can be time-consuming and costly. Moreover, some employers may conduct credit checks as part of their hiring process, and a low credit score due to prescribed debt could negatively impact a person’s chances of being hired or promoted. Finally, when applying for a rental property, landlords may also conduct credit checks to evaluate a tenant’s creditworthiness. A low credit score due to prescribed debt could also result in a landlord rejecting a rental application.

At Mi Law Legal we review your financial situation and determine whether any of your debts have prescribed. This can involve reviewing credit reports, debt statements, and other financial documents. We then assist in disputing the debt with the creditor or debt collector. This can involve sending a letter or negotiating a settlement. Also, if a creditor or debt collector takes legal action to collect on a prescribed debt, a legal firm can provide representation to the debtor in court. This can involve defending the debtor against the creditor’s claims and arguing that the debt has prescribed. Finally, we go the extra mile for our clients by providing debt management advice and education to help a person manage their finances and pay off their debts. This can involve creating a budget, negotiating with creditors, and exploring debt consolidation or other debt-relief options.