How to handle prescribed debt

The pressures of life these days often leave many people in a financial bind. Many people rely on some form of credit to get through challenging months. Others are forced to turn to credit in the event of unexpected expenses such as an emergency medical bill. Being able to be dedicated to sticking to a plan to steadily pay the debt off is a task that some people are not able to commit to. This may result in them being unable to pay their debt off for an extended period of time. In other cases, companies may close down, meaning that their debt collections are suspended for a long period of time.

What is prescribed debt?

It is “old debt” that most often exists where companies have become bankrupt or have been liquidated.

What is prescribed debtMost debts, such as clothing accounts, cellphones and credit card debt, prescribe after three years. If there has been no payment or acknowledgement of it and no summons in respect of it then the consumer is not obliged to pay the debt.

If you have not acknowledged a debt in any way, such as promising to pay at a future date; made a payment or been summoned in respect of it, you can refuse to pay.

Home loans, taxes, bonds, municipal accounts and TV Licences cannot be deemed prescribed debt as not all debt prescribes in three years. The National Credit Amendment Act was introduced in March 2015.

How to deal with prescribed debt:

Know your rights as a consumer. Be clear and firm by insisting that the debt collector not contact you again until all information regarding the debt has been sent to you in writing.

Find out when the last payment was made and if a summons was ever issued on the debt.

Remain silent until all facts are known. Many debt collectors use intimidation as a tactic, so don’t be surprised when this happens. Rather stick to not responding until you have all the necessary facts. Acknowledging the old debt may be enough to revoke its prescribed status in law.

 

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