If you have not heard from your creditor for more than three years and you suddenly get a call from some debt collector, you may be in the position to summon the Prescription Act, tell them that the concerned debt has expired and therefore you are not paying.
But it is not every type of debt which can be extinguished after three years and debt becomes prescribed or extinguished under certain well defined circumstances.
It’s important to note that debt that comes with a court judgement, mortgage bond, debt owed to the state and debt for tax have a 30 year prescription period.
For the debt that can be extinguished after three years the following must be applicable:
- You have not heard (via letter of demand or summons) from the creditor during the past three years
- You have not made payment during the last three years
- You have not confirmed or acknowledgement the debt during the past three years
But note that the prescription period can be delayed and/or interrupted if the following applies:
- If the concerned debtor has acknowledged liability
- If the creditor has administered a provable claim process on the debtor, via letter of demand or summons
- If the debtor is outside the Republic of South Africa;
- When there is an arbitration process on course
- If the creditor is a minor, insane, or under curatorship
- If creditor and the debtor are married to each other
- If the creditor and the debtor are partners and the debt arose from a partnership agreement;