It is essential to ensure that you have a Debt Recovery plan in place.  The Prescribed Debt Act is where old debt that has not been acknowledged, verbally or in writing, or paid for more than 3 years.  This is essentially debt that has been written off by credit providers.

Even though there are a few ways, proven to be very difficult and not always successful there are a few ways to attempt at recovering this debt.  However the amendments to the National Credit Act in March 2015 has made it almost impossible to recover.

Consumers no longer need to know this as a defense when dealing with Debt Collects,  it is not as easy to deal with consumers.  You have to also inform them of their rights.

If any payments and/or promises of payments have been made in those 3 years, the debt will remain valid and the consumer is still liable to pay this debt.

What are the Consumer rights when it comes to prescribed debt?

  1. A Debt will become prescribed debt, if a credit provider has not claimed payment, sent a letter and/or issued a summons or taken judgement against such consumer
  2. A Consumer has not made any acknowledgement (be it in form of payment/acknowledgement of the debt directly and/or indirectly.

The times do however change from various items.

  1. Consumer Credit in the form of Personal Loans, Credit Cards, Retail Accounts and/or Vehicle(s) carry a term of 3 years
  2. Consumer Credit in the forms of Home Loans (Mortgages), debts by court order and or money owed to SARS carry a term of up to 30 years

A Consumer can report any person and/or agency for demanding payment of prescribed debt.  A consumer can also seek legal assistance from a company to assist in investigating this matter.

Ensure you don’t loose by not having an efficient Debt Recovery Plan in place, there is a very large movement that provides all this information.