Many people do not know this but debt doesn’t last forever and has a shelf life that eventually expires. So how many years it would take for a debt to be written off?
What is old debt?
Old debt is known as prescribed debt is old debt that has not been acknowledged, verbally or in writing, or paid for more than three years.
Prescribed debt is old debt that has been written off by credit providers.
What does it mean when debt is written off?
While there are ways for creditors to still claim this debt, the amendments to the National Credit Act in March 2015 make it almost impossible for debt collectors to get back this expired debt.
Prior to this amendment it was up to the consumer to know this as a defence when dealing with collectors, and many collectors would be hoping to trick the consumer into paying the expired debt, but now there is a greater move to inform consumers of their rights.
However, if any payments or promises of payments have been made in that time, then the debt is still valid and the consumer is liable for it. Often collectors will try and find a way to trick you into acknowledging the debt during communications, and if you play into their hand and admit to knowing about it then they can hold you responsible.
Every consumer should know when their debt has been prescribed, so they no longer need to ask: How long before a debt is written off in South Africa?
A debt is prescribed when:
- A credit provider has not claimed payment, sent a letter of demand or issued summons
- A consumer has not made any payments/acknowledged the debt directly or indirectly for the time periods specified below:
- Personal loans, credit cards, retail accounts and vehicle loans: three years
- Mortgage loans, debts by court orders and money owed to the South African Revenue Service (SARS): 30 years
This change offers a helping hand to consumers, who until now, were unaware of what prescribed debt was. Often collectors would let the debt sit, gaining interest over a long period of time, before chasing down the debtors when the amount is much more than what it should have been.
What if I have prescribed debt?
If a credit provider or debt collector is demanding payment for a prescribed debt, challenge them and report them to the Council for Debt Collectors.
Or else contact us a DC Debt Clear (Pty) Ltd today for debt review today, and we will do a thorough investigation to see if any of your debt can be classified as prescribed.
Our professional DC Debt Clear Debt Counsellor will help you stay on track with your debt repayments through a quick and affordable debt assessment process, if you are in need of greater help he will introduce you to the Debt Review Process. All of our debt counsellors are registered with the National Credit Regulator (NCR). Visit our page at www.dcdebtclear.co.za for more assistance.