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 'collectable' because they have passed their prescription period. Before we get into the criteria that you have to meet for it to be considered prescribed debt, it's important to note that you can't just get a debt deleted from your credit report. The best way to get rid of a debt is to pay it up.
According to the National Credit Act (NCA), the following criteria should be met for it to qualify as prescribed debt:
- 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.
What happens when debt has prescribed?
Once a debt has prescribed, creditors are not allowed to demand payment or list it negatively on your credit report.
Find out how to clear your name on ITC in this blog post.
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
Prescribed debt can show up on your credit report as old debt. Debt you may have forgotten about. 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.
❗ Once a debt is prescribed, the creditor may not legally demand payment or list it on your credit report. Doing so is a violation of your consumer rights.
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.
Frequently Asked Questions About Prescribed Debt
Q: Can a creditor still contact me about a prescribed debt?
A: No, once a debt has prescribed, the creditor cannot legally demand payment or threaten legal action.
Q: How do I clear a prescribed debt in South Africa?
A: You can contact the credit bureau where you got your credit report from and dispute the debt.
Q: Can you be blacklisted for prescribed debt?
A: No, you cannot be blacklisted for prescribed debt. There's also technically no such thing as blacklisting in South Africa. Read our blog post for more.
Q: Can prescribed debt be reinstated?
A: Only if you acknowledged it after prescription or made a payment, it restarts the clock.
Q: How long does it take to remove prescribed debt from my credit report?
A: Once disputed, credit bureaus must respond within 20 working days.
Need help with prescribed debt or debt review?
👉 Contact Meerkat today for a free consultation.
