Prescribed debt for personal loans can be explained as old debt relating to short term loans that had not been acknowledged over a period of three years. In 2015, amendments were made to the National Credit Act (NCA) which clearly states that credit providers and debt collectors cannot try to collect payments on a prescribed debt. However, with many consumers remaining in the dark about prescribed debt, debt collectors still manage to collect millions of Rands from consumers who are not legally obligated to repay.

Debt can only be prescribed under the following conditions:

  • You have not made any payments towards the outstanding amount, nor have you promised to pay.
  • You have not acknowledged the debt in the past 3 consecutive years.
  • The creditor has not summoned you for this debt within 3 years.

In most cases, the debt has been written off by the credit provider and then sold for peanuts to a debt collector. The debt collectors then harass debtors in order to get them to settle their debt, in spite of it being prescribed. These payment requests are often accompanied by a threat to blacklist the consumer if the debt is not paid. This threat carries no weight, as a prescribed debt may not be listed on their credit profile. However, it is the responsibility of the consumer to inform the debt collector that the debt had prescribed, in order to prevent them from calling again.