Having debt feels like walking around with a backpack full of bricks.
It slows us down, and it’s heavy.
Luckily, South Africa has several legal ways to help lighten the load—or even ditch it entirely.
Let’s go break down the different ways you can get your debt written off and how to get started.
How to get your debt written off in South Africa
In South Africa, debt can be written off or reduced through legal processes such as prescription, debt counselling or debt review, sequestration, and settlement agreements.
- Prescription – If a creditor doesn’t pursue repayment for three years (or six years for certain debts), the debt may expire under the Prescription Act.
- Settlement agreements – Negotiating with creditors to pay a reduced amount, with the rest written off.
- Debt counselling (debt review) – A structured repayment plan that may lead to some debt being written off if creditors agree.
- Sequestration – Declaring insolvency allows for assets to be liquidated, with the remaining debt potentially written off.
Each method has specific requirements and implications, so it’s important to understand how it all works.
Here are the details.
We help thousands of South Africans reduce monthly debt costs, protect their assets, and stay out of court—find out what we can do for you.
4 ways debt can be written off or reduced
1. Prescription
If a creditor doesn’t try to collect a debt for several years, the debt may expire under the Prescription Act. Most types of debts prescribe within three to six years. Some take longer, and some debts never prescribe.
We go into detail on all of the ‘prescription periods’ in this article: What is prescribed debt? (+ how to avoid paying it)—here is a quick overview.
Prescription periods for different debts
Different types of debts have varying prescription periods according to South African law:
- Three-year prescription period – Common for unsecured debts like personal loans, credit card debt, store accounts, gym memberships, cell phone contracts, and medical bills.
- Thirty-year prescription period – Applies to long-term debts such as mortgage bonds and court-ordered judgments.
- Non-prescribing debts – Certain debts, like TV licenses and municipal rates and taxes, never prescribe and remain collectable indefinitely.
So, depending on the type of debt you owe, it could expire sooner—or not at all.
That’s why this option deserves a warning label…
⚠️ Caution against relying on prescription
While waiting for a debt to prescribe might seem like an easy way to avoid repayment, it can backfire. Creditors can still pursue you through legal means before the debt prescribes, adding extra fees and interest that increase the total amount owed.
Additionally, acknowledging the debt in any way—such as making a payment or confirming the debt in writing—can reset the prescription period, allowing creditors to legally pursue the debt again (plus all the extra fees that have built up over time).
DO NOT ignore your debt, hoping it will prescribe so you can “write it off”. It doesn’t work.
2. Settlement agreements
You can negotiate with creditors to pay a reduced lump-sum amount, with the remaining debt written off after payment.
Example: If you owe R50,000 on a credit card, your creditor might agree to a settlement where you pay R40,000 upfront, and the remaining R10,000 is written off.
Negotiating might sound intimidating, but it can save you a significant amount—worth the effort, right?
We help thousands of South Africans reduce monthly debt costs, protect their assets, and stay out of court—find out what we can do for you.
3. Debt review and debt counselling
Debt review is a legal process introduced by the National Credit Act (NCA) to help over-indebted consumers restructure their debt repayments. A registered debt counsellor negotiates with creditors to lower monthly payments, often reducing interest rates and extending the repayment period. In some cases, creditors may agree to write off a portion of the debt.
The goal here? Make the debt more affordable.
How debt review works
- Debt and affordability assessment: A debt counsellor reviews the applicant’s financial situation to determine whether they qualify for debt review.
- Negotiation with creditors: The counsellor contacts the creditors to restructure the repayment plan. This reduces the monthly cost of the debt.
- Court approval: Once an agreement is reached, a court order is issued to enforce the new payment terms.
- Ongoing payments under the new lower repayment plan: The borrower makes one consolidated monthly payment, which gets distributed to each of the creditors.
- Debt clearance: Once all debts are settled, you receive a clearance certificate, and your credit record is updated to reflect that you are debt-free.
New legislation to write off debt
The Debt Intervention Bill was signed into law in 2019 but is not yet in force.
When implemented, it will offer relief for South Africans struggling with unmanageable debt, particularly those with lower incomes and smaller amounts of unsecured debt.
People who qualify can go through an assessment with the help of a debt counsellor.
Depending on the outcome, they may be placed under debt review, granted a temporary suspension of up to 24 months, or, in severe cases, have the debt written off entirely.
4. Sequestration
Sequestration is a legal process that starts when someone is declared insolvent. A court issues a sequestration order and appoints a trustee, who is responsible for selling the insolvent person’s belongings. The money from these sales is then used to repay the person’s debts as much as possible.
Example: If you owe R500,000, but your assets only cover R400,000 after liquidation, the remaining R100,000 could potentially be written off once sequestration is complete.
It’s a drastic step. But for some, it’s the reset button needed for a fresh financial start. After sequestration, individuals need to apply for ‘rehabilitation’ (either automatically after 4 years or sooner by court application) to restore their financial status and start rebuilding their credit.
Disadvantages of sequestration
- Losing belongings: Your assets are sold to repay your debts, meaning you could lose valuable personal property.
- Severe credit profile damage: Sequestration significantly damages your credit record and can stay on your report for up to 10 years.
- It’s expensive: The process involves expensive legal and administrative fees, adding to your financial burden.
Sequestration isn’t a decision to take lightly—it’s often a last resort when all other debt solutions have failed.
Final thoughts
That is how debt can be written off in South Africa.
It is essential to understand things like prescription periods and the negative impact of insolvency and sequestration.
Generally, ‘writing off debt’ is a last resort for the court. The best way to manage unaffordable debt is with debt counselling. It’s safe, borrowers get to keep all their stuff, and it doesn’t affect credit history like sequestration.
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.
