THE LENGTH OF TIME UNPAID DEBT CAN LAST IN SOUTH AFRICA
When a debt becomes due and payable, a timer starts running for the creditor to make use the full force of law against the debtor in order to collect the debt owed to them. A debt becomes due and payable when the creditor is aware that the debt is due. The creditor is unable to claim back what is owed to them once the timer runs out, this is known as prescription. A debt that has prescribed prevents the creditor from using legal action to claim the debt.
The prescription period varies depending on the type of debt that is owed:
30 Years
A Judgment debt has thirty years to prescribe from the date of judgment. Debt that arises from law in respect of tax levied in terms of any statute. A mortgage bond has thirty years from the date of when the debt became due and payable. Debts that are owed to the State arising from mining of materials and other substances.
15 Years
Any debt that is owed to the State regarding loans, the lease and/or the sale of land, unless a longer period is stipulated.
6 Years
Notarial contracts where there is not a longer period stipulated or where any of the above debts apply. A cheque, promissory note or any similar bill of exchange as a negotiable instrument also have six years before it prescribes.
3 Years
Any other debt is three years prescription period. This is where most debts will fall such as damages to a motor vehicle in a motor vehicle collision, personal loans, credit cards, retail accounts, and motor vehicle loans. Unless this debt is specifically provided for by another statute.
Interruption of Prescription
It is important to note that prescription may be interrupted. This means that the prescription timer will run afresh when the creditor serves summons on the debtor, and/or after an acknowledgement by the debtor to the creditor of a liability to pay the debt.
In conclusion
Most debts will prescribe after three years. This is to ensure that the affairs between debtors and creditors are regulated by effective time periods. Consult Stegmanns if you are trying to claim any debt at your earliest convenience to prevent the debt owed to you from being unenforceable or let us protect you from your debts that have prescribed.