Managing your finances can be a challenge, especially when old debts seem to resurface unexpectedly. Many South Africans are unaware of the concept of prescribed debt—debt that has expired and can no longer be legally collected under certain conditions. This article will guide you through understanding prescribed debt, how to check if your debt is prescribed, and what steps you can take to clean up your credit report.
What is Prescribed Debt?
Prescribed debt refers to old debts that are no longer legally enforceable because they have passed their prescription period. According to the National Credit Act (NCA), a debt becomes prescribed if:
- It hasn’t been acknowledged (in writing or payment) for three years or more (for most types of debt).
- The creditor hasn’t taken legal action to enforce the debt within the prescription period.
- You haven’t been summonsed regarding the debt.
Certain types of debt, like mortgage bonds, have longer prescription periods. However, once a debt has prescribed, creditors are not allowed to demand payment or list it negatively on your credit report.
How to Check if Your Debt is Prescribed
Many consumers unknowingly pay prescribed debt simply because they are unaware of their rights. Here’s how you can determine if your debt is prescribed:
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Review Your Credit Report
Obtain your free annual credit report from a registered credit bureau like TransUnion, Experian, or ClearScore. Look for any old debts that may have exceeded the three-year prescription period. -
Identify Prescribed Debts
- Check the last date of payment or acknowledgement of the debt.
- Ensure there has been no legal action or summons related to the debt during the three years.
- Confirm the type of debt and its applicable prescription period.
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Dispute Incorrect Listings
If you find prescribed debt on your credit report, dispute the listing with the credit bureau. Provide evidence of the debt’s prescription status, such as correspondence or account records showing no activity within the prescribed period.
Can debt review be removed if debt has prescribed?
Meerkat specialises in helping consumers regain control of their finances. If you suspect your debt has been prescribed and you are flagged as under debt review, we can assist you in obtaining a clearance certificate to ensure your credit report reflects accurate and up-to-date information.
