Many South Africans are hounded by debt collectors on a daily basis, and rather than finding a suitable debt solution, they buckle under hollow threats and end up paying more, or even paying debts that have reached prescription.
The Prescription Act 68 of 1969 is not well known by South African consumers. However it is important that a consumer understand that it exists as a debt solution.
The act states that if a debt becomes old, it can reach a point where the consumer no longer has an obligation to pay. Although there are numerous legalities attached to prescription, consumers are advised to look into a prescription inquiry if they have not paid the debt in three years. Of course there must have been no acknowledgement of the debt, nor should the consumer have been summoned with regard to it.
Before investigation debt solutions such as sequestration, consolidation or debt counselling, always check which of your debts have been prescribed. There is no sense in paying a debt that is no longer an obligation.
Creditors trap consumers by getting them to respond to summons and communications about debts that ought to have prescribed, therefore be aware of the prescription period in order to know your rights and to know when you have the right to say no to a creditor.
Of course it is never wise to try and let a debt run to prescription, as defaulting on your debts can have serious legal ramifications and could cripple your credit score for up to 15 years. Just remain alert of the legalities prescribed to all forms of debt.
Article written by: Andrea van Tonder 03-2013