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What is prescribed debt? (+ how to avoid paying pay it)

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Woman in yellow top checking her financial records for prescribed debt at a desk.

When debt is prescribed, debt collectors must stop trying to collect it. The law prohibits it.

Sounds awesome, right? Almost like a free write-off…

But that’s not the case. There’s more to prescribed debt. And there are a few traps you need to be aware of, too.

Here’s what you need to know.

 

What is prescribed debt?

Prescribed debt refers to debt that can no longer be legally collected because too much time has passed. Certain types of debt prescribe when there is no activity or acknowledgement by the person who owes money. Some debts prescribe after three years, others after thirty, and some never prescribe.

This doesn’t make prescribed debt a ‘get-out-of-jail-free card’. Remember, fees build up when debts go unpaid. In most cases, trying to wait for debt to expire only adds to the cost and the damage.

Remember, any acknowledgement or payment resets the prescription period. That means debt collectors can still come after their money.

A better way to ‘get rid’ of debt is by using a service like debt counselling to reduce the cost so you can afford to pay off the debt. It is safer and, in the long run, will help you build a strong credit report.

Let’s see which debts prescribe and how each type takes to prescribe.

 

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Which debts can and cannot prescribe

Not all debts prescribe. While other debts take so long to prescribe that they almost never do. Home loans and debt involving a court ruling prescribe after thirty years. TV licence and debt related to municipal rates and taxes never expire.

Here’s a table to make it clear:

Debt Type Prescription Period Description
Personal loans 3 years Money borrowed from a bank or financial institution for personal use.
Credit card debt 3 years Outstanding balances on your credit card.
Retail store accounts 3 years Debts from store credit cards or payment plans.
Gym memberships 3 years Unpaid fees for gym subscriptions.
Cell phone contracts 3 years Outstanding payments for mobile phone services.
Medical bills 3 years Unpaid medical expenses.
Debt relating to a negotiable instrument 6 years This includes cheques and promissory notes.
Court-ordered debt 30 years Debts ordered by a court, such as maintenance orders.
Mortgage loans 30 years Loans taken out to buy property or a home.
Debt secured by a mortgage bond 30 years Debt secured by a mortgage bond.
Court judgement debts 30 years Debts confirmed by a court judgement.
Tax or levies 30 years Debt owed to the state, such as taxes and certain royalties.
TV licences Never Annual fees for owning and using a television set.​
Municipal rates and taxes Never Fees and taxes owed to local municipalities.

 

Debts with extended prescription periods

Some debts have longer prescription periods, meaning they take longer to prescribe. Here are the common ones:

Debts with a six-year prescription period
  • Debt relating to a negotiable instrument: This includes cheques and promissory notes. ​

 

Debts with a thirty-year prescription period
  • Mortgage bonds: Debt secured by a mortgage bond
  • Court judgement debts: Debts confirmed by a court judgement, and court-ordered debts like maintenance orders.
  • Tax or levies: Debt owed to the state, such as taxes and certain royalties.

 

How long debts take to prescribe are regulated by the Prescription Act 68 of 1969. It outlines the time frames for different types of debts.

Now, you may be wondering whether any of your debt is prescribed…

Here’s how you can find out.

 

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What is your estimate?

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*The calculation is an estimate actual amounts may vary.

What is your estimate?

Try our debt reduction calculator to calculate your lower monthly debt instalment*.

*The calculation is an estimate actual amounts may vary.

debt review calculator
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If applicable, enter your current monthly repayment amount for your home and vehicle debt below.

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Continue by adding what you pay each month for each category below.

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How to check if my debt is prescribed

To check whether debt is prescribed, review when last there was a payment and communication related to the debt. Depending on the type of debt, there needs to be zero acknowledgement and no payment activity for more than three, six, or thirty years for the debt to prescribe. Statements, credit reports, and email history can help.

But remember… asking creditors about the account could reset the prescription period.

Steps to check whether debt is prescribed:

  1. Review payment dates: Look at the last payment or written acknowledgement date.
  2. Check credit report: Review your credit report for outstanding debts.
  3. Consult legal advice: If unsure, consult a legal expert for confirmation without acknowledging the debt to the creditor.

 

Related content: How to check if you are blacklisted (+ what to look for)

Next, let’s go over how to clean your credit report and remove prescribed debt.

 

How to handle prescribed debt

If a debt collector is harassing you about debt you think has prescribed, do not admit to owing the debt. Simply state that you dispute the claim and ask the debt collector to stop contacting you. If the debt collector continues, talk to a legal expert or lawyer. They can help you to get debt collectors to stop without accidentally resetting the prescription period.

Related content:

 

How to remove prescribed debt from your credit report

To remove prescribed debt from a credit report, simply check the report and log a dispute with the credit bureau. Request a credit report or use an app to check it. Then, use the credit bureau’s app or website to submit a dispute. If the debt is prescribed, then the credit bureau must investigate and update the report within 30 to 45 days.

Again, be careful. Poor word choices in your dispute could be seen as an acknowledgement of the debt. Get help from a professional if you can.

 

In summary

Okay, here are the big takeaways…

  • Not all debts prescribe, and the ones that do, do so at different periods.
  • Prescribed debt is NOT a get-out-of-jail-free card for debt
  • In essence, the purpose of prescribed debt is to stop debt collectors from digging up unnecessarily old accounts and unfairly harassing consumers
  • Payment or acknowledgement can reset the prescription period—be careful

 

Waiting for debt to prescribe is very risky and it’ll likely only result in more and more fees building up each month. 

It’s better to find a way to pay off the debt.

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.

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