A debt can prescribe if the credit provider makes no effort to collect the debt from you for three years or more from the due date.
This is in accordance with the Prescription Act which states that a contractual debt prescribes if you don’t pay or acknowledge the debt in any way, and the creditor doesn’t institute legal action by serving a summons to you within three years of the due date.
A prescribed debt should be written off, which means you no longer have to repay it and the credit bureaux need to update their records accordingly. Debt collectors are also prohibited from contacting you or harassing you to pay a prescribed debt.
Any debt you owe in line with a credit agreement as defined by the National Credit Act may prescribe under the Prescription Act.
This applies to all credit arrangements made at arm’s length, including bank overdrafts, store cards, personal loans, credit card debt and vehicle financing. These debts prescribe after three years, but debt related to a home loan takes 30 years to prescribe, as does a judgement obtained by your credit provider.
Credit arrangements between friends or family members do not fall under the National Credit Act, but are still governed by the Prescription Act. So, they also prescribe after three years if they have not been acknowledged and the creditor fails to take legal action within three years from the date on which you default on the repayments.
It is important to remember that you cannot change your contact details without 
notifying the creditor and expect that your debt will prescribe because your creditor is unable to contact you.
If your creditor has attempted to contact you using the information they have on file, and can prove this, the debt will not be written off and the creditor will be entitled to claim payment. Prescription occurs only when the creditor fails to take action to recover the money owed to it.
You don’t have to do anything in order for a debt to prescribe - it happens automatically in line with the Prescription Act.
Once a debt has been prescribed, it should be written off and can’t be sold or collected in the future.
Credit providers should not knowingly sell a debt that has prescribed, regardless of whether you have used prescription as a reason not to pay.
The prescription period can be interrupted if you make a repayment on the debt, acknowledge your liability for the debt or the creditor issues you a summons. Once this occurs, the prescription period begins again from this point.
The credit bureaux will reflect all your outstanding debts on your credit report. You should obtain a copy of your credit report on a regular basis, and if you believe that a debt should have prescribed, contact the creditor and request proof that they have taken steps to prevent the debt from being prescribed.
Do not acknowledge any liability, whether expressly or tacitly, as even a tacit acknowledgement can interrupt prescription - state only that you are requesting proof.
If the credit provider is unable to show that it has attempted to contact you within the past three years since the debt fell due, the debt should be written off and removed from your credit report. If the provider refuses, file a dispute with the National Financial Ombud Scheme South Africa and an investigation will be conducted, possibly leading to your credit record being updated and the debt listing being erased.
If you have entered into debt counselling and a debt that is included in a debt review process has prescribed, you may exit the process once you have met all the conditions required for successfully exiting debt review.
