How long do you have to wait until debt is prescribed?

If you’re wishing your debt would go away, your wish may come true if the debt is prescribed. Prescription essentially means your debt has expired and you’re under no legal obligation to repay it.

Besides, it becomes illegal for a collector to ask you to make payments.

How do you know if your debt is prescribed?

Most debt prescribes after three years. But that only happens if you meet three conditions:

• Haven’t acknowledged or made arrangements to repay the debt for that period.
• Didn’t make any payments toward the outstanding balance.
• You haven’t received a summons, or there hasn’t been a judgment on the debt.

This three-year countdown doesn’t begin when you sign the contract. It starts from the last time you made a payment or acknowledged your debt.

Often, debt collectors won’t share that debt is prescribed or is months away from prescribing when they start pursuing you aggressively.

Debt collectors typically don’t share this information because they’ve purchased your debt. To get a return on the investment, they need you to resume payments. When you resume payments, no matter how small, you restart the clock.

Therefore, it is your responsibility not to get taken in by threats, even if they include blacklisting or judgments.

Managing debt collection calls on old debts

If you’re unsure if a debt has prescribed, you can ask the caller when the last payment was made on the account. Don’t acknowledge the debt.

Instead, ask them to clarify what they are calling about and follow up with: “when was the last payment made?”

At this stage, they may become vague and give a month. Ask them to clarify the year.

If it’s been more than three years, you should report this debt collector to the Council for Debt Collectors.

It is against the law to pursue repayment on a debt that has prescribed. Specifically, it is against Section 126b of the National Credit Act 34 of 2005.

If it’s closing in on 3 years, don’t agree to make a payment or acknowledge the debt.

Debt that takes longer than 3 years to prescribe

Debts arising from credit cards, store cards and store credit, bank fees, cell phone contracts, gym memberships and personal loans prescribe after 3 years, if they meet the conditions mentioned above.

However, a home loan, outstanding taxes, municipal rates, and debts where there’s been a judgment, only prescribe after 30 years.

What happens to prescribed debt?

When a debt prescribes, it will no longer show up on your credit report.

You should check your credit report and dispute all debts that you believe have prescribed.

Years of unpaid debt will mean your credit score is low. If you want to get better interest rates when you apply for credit, you need to rebuild your credit.

That means paying all your current bills on time. You can also rebuild your credit by closing unused credit. Your credit exposure adds to your debt-to-income ratio, even if you’re not using it.