Krisxa Financial Services
BOOK APPOINTMENT

CONTACT US

PRESCRIBED DEBT REMOVAL

In most cases, credit providers have three years to claim payment. However, different types of debt have different prescription time periods attached to them.
Once the three years has lapsed and you have received no demand for payment, no legal action has been initiated against you and no communication whatsoever has occurred – your debt becomes prescribed.
Essentially, this means that your debt is cancelled, and the credit provider permanently loses their right to claim payment on the debt. However, this is on condition that your residential address and contact details remained the same during the prescription period and that the credit provider was informed of any changes.
Prescription does not apply if there is reasonable evidence that the credit provider tried to contact you during the prescription period.

What the law says

Under South African law, namely, the Prescription Act read with the National Credit Act, a debtor’s obligation to pay off a specific debt can be extinguished due to the passing of a prescribed period.
The Prescription Act provides the period after which an obligation ends – typically three years – and the instances in which this period could be delayed or interrupted.
Exceptions where the prescription period for certain debts is longer include but are not limited to a bank’s claim for the repayment of a monetary debt based on a court order or claims for debts secured by mortgaged bonds. Debt in these scenarios prescribe after 30 years.
Steyn added that the legality of the collection of a prescribed debt depends on whether it falls under the National Credit Act or not.
“In other words, whether the debt relates to a credit agreement and falls within the definition of a ‘credit agreement’ as described in the Act.” Some examples of debt under the NCA include:
  • Overdraft facilities.
  • Mortgage loans.
  • Personal loans;
  • Credit card debt; and
  • Vehicle finance agreements.
    It is, however, still legal for creditors to demand payment or call consumers to get them to acknowledge a prescribed debt and even sue on a prescribed debt for agreements falling outside the National Credit Act.
    Once a consumer has acknowledged owing the debt – even if they have not made payment – they will not be successful in raising prescription as a defence in court.
    Consumers are not required to be aware of this law as, under the protection afforded by law, the banks and other creditors are prohibited from collecting or selling debt that has prescribed.
    Consumers also do not have to raise the defence of prescription to be absolved from paying these debts and to have their credit bureaus profiles updated to reflect the correct situation, added Steyn.

    Prescription interruptions
    If any of the following apply to you, prescription will not apply.
  • If you acknowledge the debt or make payment on the debt.
  • The credit provider takes legal action against you.
  • You live outside of South Africa.
  • You are business partners with, or married to, the credit provider.
    We can Update and Remove permanently prescribed Debt
  • Duration: 21 Days
  • Fee: From R2500(fee differs per profile)

    • Previous Service

    ITC CLEARANCE

    Next Service

    JUDGEMENT REMOVAL