Dealing with Prescribed Debt: Your Rights and What to Do
What is the Prescription of Debt?
Prescription of debt refers to the legal timeframe within which a debt can be enforced through legal means. In South Africa, the Prescription Act stipulates that the basic period of prescription is 30 years for a judgment of debt and 3 years for any other debt. After the prescribed period has passed, the debt is considered extinguished, and you cannot be forced to pay it.
Prescribed Debt vs. Debt Written Off:
It’s important not to confuse prescribed debt with “debt written off.” Credit providers may choose to write off a debt, but this does not eliminate their legal right to collect it. Prescribed debt, on the other hand, is completely extinguished and does not require payment.
Dealing with calls from debt collectors
If you receive a call from a debt collector claiming you owe a debt that has prescribed, it’s important to know your rights. Read this article to understand what to do when faced with such a situation and how to protect yourself.
Receiving a phone call from a debt collector can be unsettling, especially when they demand payment for a debt you have no recollection of. In some cases, this could be an attempt by debt collectors to collect on a prescribed debt, using tactics to pressure you into making payments. Understanding your rights and knowing how to respond is crucial. This article will explain what prescription of debt means, how it affects you, and what steps to take if you receive such a call.
Tactics Used by Debt Collectors:
Debt collectors often employ deceptive tactics to collect prescribed debt. One common strategy is to request a small payment, such as R20.00, to “settle” the debt. However, any payment made, regardless of the amount, can restart the prescription period, making you liable for the full debt again. Similarly, any written acknowledgement of the debt also interrupts the prescription period.
What to Do When Contacted by a Debt Collector:
- Stay calm and don’t confirm or acknowledge the debt: If you believe the debt is older than 3 years and you haven’t made any payments or signed an acknowledgement in the last 3 years, avoid confirming or acknowledging anything over the phone.
- Refrain from making any payments: Making a payment, no matter how small, can restart the prescription period, reviving the debt and obligating you to pay it in full.
- Seek professional advice: If you’re unsure about the status of the debt or how to respond, it’s wise to consult with a legal expert or debt advisor before taking any action.