09 Feb How Long Before Debt is Written Off?
Many people in South Africa struggle to pay off their debt and wish it could be cancelled. However, this is only possible if the debt is prescribed, which means a specific period of time has passed without any payment or acknowledgement of the debt. In most cases, you will still be responsible for paying off your debt. If you are unsure if your debt is prescribed, it’s worth learning more about it to understand your financial situation better.
Understanding Prescribed Debt
Prescribed debt refers to debts that have expired and are no longer required to be paid by consumers. If you haven’t acknowledged or paid a debt for more than 36 months, it’s usually written off. However, different types of loans have different time limits for prescriptions. For instance, a mortgage bond or judgment debt can only be prescribed after 30 years.
To ensure the prescription of a debt, you shouldn’t have acknowledged it in writing or verbally in the past three years, made any payment or promised to make any payment towards the debt, or been summoned to make a payment by a creditor for the debt within the past three years. Once a debt is prescribed, creditors can’t take legal action against you to recover the money owed.
Implications of Debt Write-Off
Before answering the question “How long before debt is written off?”, it’s important that you know what happens when debt is written off. Debt write-off is a process where the creditor nullifies or disregards the amount you owe them. However, for this to happen, you need to have made no payments and never received any collection communication or notice of legal action from the creditor. The debt must have been completely forgotten about by both you and the creditor, with no contact regarding the debt from either side.
Keep in mind that ignoring your debt in hopes that it will go away isn’t a good idea. It could lead to repossession of assets or further legal action, resulting in higher costs. Instead, it’s essential to seek assistance if you’re struggling with debt repayments. Since the amendments made to the National Credit Act (NCA) in 2015, it has become harder for creditors and collectors to reclaim prescribed debt. However, creditors may still attempt to pursue collection, using tactics such as constant calling to get you to acknowledge the debt, thereby restarting the prescription period.
Get Debt Help Today!
If you’re struggling to pay off your debt, it’s important to understand the concept of prescribed debt. It’s important to note that although prescribed debt refers to debts that have expired and are no longer required to be paid by consumers, you will still be responsible for paying off your debt in most cases.
If you’re overindebted or unsure about your debt situation, it’s essential to seek help to get a better understanding of your financial situation. Contact us today for a debt review and explore options to manage your debt and become debt-free. Remember, taking action to deal with your debt is the best way to avoid financial stress and improve your financial well-being.