At some point, debt collectors have to give up and ‘write off’ some debt.
It’s the law.
That’s right. Certain debts have an expiration date. But not all debts, and not under just any circumstances…
So listen carefully.
After how many years is debt written off in South Africa?
In South Africa, some common types of debt can be written off after at least 3-years. Some debts are written off after 6-years, others after 30-years, and municipal rates and taxes or tv licence debt are never written off. If there is no activity and zero acknowledgement throughout this period, then the debt becomes prescribed. Which effectively means it should be written off.
We’ll tell you everything about write-offs or debt expiring in a sec, but if you really want to go deep on the legal specifics of prescribed debt, check out our post: What is prescribed debt?
Struggling to keep up with your debt? Our team can help make your debt affordable once again. We help thousands of South Africans to reduce their monthly debt repayments, protect them from legal action, and keep their assets — our team can help you too.
Prescribed debt in South Africa
In South Africa, debt that is written off is known as prescribed debt. Most common debts prescribe after either three, six, or thirty years. This is known as the prescription period. Think of it as the time it takes for the debt to ‘expire’. Debts that can become prescribed include credit card debt, personal loans, retail accounts, and cell phone contracts. Mortgage bonds and some judgments may also prescribe, but these have a prescription period of 30 years.
If a creditor does not take legal action or if the debtor does not acknowledge the debt within the prescription period, the debt collector may no longer legally collect the debt.
All of this is regulated by the Prescription Act 68 of 1969.
If a debt is written off, can it still be collected?
No, the debt may not be legally collected once a debt is prescribed (or ‘written off’). But customers can’t use prescription as a defence in court if they’ve acknowledged owing the debt (on record) or made a payment.
Despite this, creditors may continue to call to try and recover the money or interrupt the prescription. So be careful.
Here’s an example of how it works:
Let’s say Sam has a credit card debt that she last paid in July 2021. If she doesn’t make any further payments or acknowledge the debt in some way (in an email or on a recorded call, for example), and the creditor doesn’t take legal action against her by July 2024, the debt will prescribe.
Which means the creditor cannot legally force Sam to pay it (unless she acknowledges the debt or makes a payment.)
Sounds promising, doesn’t it?
Just wait. It’s not as easy as it sounds…
How to get your debt written off in South Africa
To have a debt written off in South Africa, the debt must meet certain legal requirements to be regarded as prescribed. This means:
- There must be no acknowledgement or payment towards the debt for the applicable prescription period.
- The creditor mustn’t take any legal action during the prescription period.
Once these conditions are met, the debt is considered prescribed, and the creditor cannot legally enforce it.
Can you see why that makes it hard to pull off?
Here’s why trying to wait for debt to ‘expire’ is a bad idea…
- The debt incurs more interest and fees: While waiting for debt to prescribe, interest and fees continue to accumulate, making the debt even larger.
- There’s the risk of legal action: Creditors may take legal action just before the prescription period ends, leaving you with a court judgement and A LOT of extra costs.
- It’s possible to accidentally reset the prescription period: The prescription period can be reset if you make a payment or acknowledge the debt in writing or verbally. Even challenging the debt could be seen as acknowledgment, which resets the prescription period. After which debt collectors regain the right to recover the debt and ALL of the interest, fees, and cost that built up over time.
So, what’s the best way to get rid of debt?
A better way to get rid of unaffordable debt
While waiting for debt to be ‘written off’ [or prescribe] may seem like a way to get out of debt—it’s not. It’s an insane strategy that’s almost guaranteed to do a lot of harm.
The government created a solution, specifically for South Africans with unaffordable debt. It’s called debt counselling or debt review.
What is your estimate? *The calculation is an estimate actual amounts may vary. What is your estimate? *The calculation is an estimate actual amounts may vary.
Try our debt reduction calculator to calculate your lower monthly debt instalment*.
Try our debt reduction calculator to calculate your lower monthly debt instalment*.
How debt counselling (debt review) helps get rid of debt
Instead of trying to ignore the debt and hoping that it goes away, why not try something else? Debt counselling is designed to make debt more affordable.
That’s right. It makes debt cost less each month. So, if you can’t afford everything right now, debt counselling will change that.
The advantages of debt counselling:
- Protects consumers from legal action: It legally prevents creditors from taking legal action (like repossessing someone’s car).
- Reduces the monthly cost and interest: Debt counselling is designed to make the monthly cost of a person’s debt affordable. Debt counsellors typically reduce the cost by several thousand rands each month.
- Consolidates payments payments: Everything, all the various debts and accounts get merged into one easy-to-track, and easy-to-pay payment.
It’s the best way to get out of debt—by far.
The reason it works so well is because the process works with everyone involved. The person who owes money, banks and creditors, and it’s all regulated by law (The National Credit Act).
The result is a structured path for anyone to go from “I can’t afford my debt” to “I have zero debt.”
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In summary
What did we learn? Debt can [and has to] be written off. It’s in the law. But, the conditions are strict and the expiry periods are long. Which makes it risky.
The other thing to remember is that costs build up when debt goes unpaid. This can get really messy.
So, while prescribed debt exists, it’s unlikely that relying on it as a way to get out of debt will work.
Instead, South Africans should turn to safe solutions like debt counselling.
If you want to talk to someone about managing your debt, we can help. Try our online assessment at My Debt Hero to see if you qualify to reduce your debt.
