prescribed debt

A question asked by many when confronted with the term for the first time, what is prescribed debt? A set of circumstances that is fairly unknown to many members of the general public in South Africa, many of whom are caught out because of it, prescribed debt is an integral part of debt collection that every citizen should be educated about.

Prescribed debt is, to put it simply, old debt that has not been acknowledged by either debtor or creditor, or paid within three years. Often passed on to and chased down by debt collectors once the prescription has come into place, many credit users do not know that this debt must be acknowledged by the debtor before it has to be paid. Without acknowledgement this debt counts for nothing and there is no obligation to pay it back – unless the only communication fault was on the side of the debtor, you cannot just ignore a creditor and hope your debt will prescribe over time.

If a debtor has made movement to attempt to pay into a prescribed debt, or acknowledge its existence when talking to creditors, they will have forfeited the prescription defense without even knowing they could claim it and will became liable for the debt once again even though it has prescribed. This will include years of interest and fees incurred, which should urge everyone to be responsible when paying debts and to know their position. This is often how debt collectors trick debtors into paying prescribed debt, getting them to acknowledging the debt before the debtor realizes what they are talking about.

A big reason for the prescription defense is to protect the consumer from insane and unreasonable interest, as well as accumulated fees, that the creditor left to build up over this long period of time. As this can lead to huge and almost unpayable debt at the end of the day, prescription ensures that creditors that want to collect must do so in a timely and decent manner.

So the next time someone asks you “What is prescribed debt?”, take the time to explain, share the knowledge you have learned and help to protect others from this potentially devastating line of debt and its resulting collection. This is your chance to take control of debt and reckless lending.