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WHEN IS YOUR FINANCIAL DEBT PRESCRIBED?

I was listening to a discussion on R.S.G., a local South African radio station where this topic was being discussed by financial experts were discussing this topic and the below information was shared with the listeners; Debt collectors are devising devious and illegal ways to extort cash from you, BEWARE!

All debt is prescribed after 3 years, excluding
  • A home loan
  • Municipal accounts
  • Monies owed to SARS
  • Your TV License
, which is never prescribed. What this implies is, that no one has the right to demand any prescribed debt older than 3 years.



WHAT IS PRESCRIBED DEBT?

20 June 2013

Do you have prescribed debt?

Prescribed debt can be explained as old debt that has not been acknowledged 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:
  • Retail accounts
  • Credit card accounts
  • Telkom accounts
  • Personal Loans / Payday Loans
  • Gym memberships
  • Cellphone accounts
  • Monies owed on vehicle finance

Not all debt prescribes in three years. A 30 year prescription period relates to;

  • A home loan
  • Municipal accounts
  • Monies owed to SARS
  • Your TV License

What does this mean for you as a consumer?

Everyone has to pay off their debt. It is wrong not to pay it off. However, it is also wrong for a debt collector or credit provider to demand payment many years after you have defaulted on the account.

If your debt has prescribed;

It has been dormant for three of 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, published 13 March 2015, 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, tell them to stop harassing you. 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 harassing you.

If your debt has not prescribed;

You have acknowledged your outstanding debt within a period of three years or have made a payment, your debt remains valid and you are accountable for paying it off.

You can make arrangements with DebtBusters to help you pay back your debt.

Simply fill in the free call back form on the right hand side and a DebtBusters financial consultant will call you back. If you are not sure whether you have prescribed debt, DebtBusters will be able to help you find out.


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