Debt collection is the process of pursing payment of debts owed – it is often done by an agent (attorney or debt collector) on behalf of the creditor provider. The important thing to note is an attorney can only pursue the payments if the debt has not yet prescribed. This article will serve to equip you with the knowledge to determine when a debt prescribes.

The prescription act [1] defines prescription as the period of time available in order to pay debts off. Once that time has lapsed, the right to claim on a debt is extinguished. For contractual debts, the prescription period is three (3) years. Prescription begins to run at the moment the debt is due. This is normally stipulated in the contract.

 Once a debt claim is prescribed, the credit provider permanently loses her right to demand payment of the debt; on the condition that during the period of 3 years, the residential address and contact details of the debtor remained the same. If there is evidence that a credit provider reasonably tried to contact the debtor, then the claim will not prescribe.

There are, however, certain occurrences that interrupt or suspend the running of prescription. Prescription interrupted means that the running of the prescription period has essentially been stopped. These include tacit or explicit acknowledgement of the debt by the debtor and institution of any legal action against the debtor [2].

Prescription is suspended if one of the following restrictions apply:

• The creditor is a minor, mentally ill or placed under curatorship
• The debtor resides outside of South Africa
• The creditor and debtor are married to each other
• The debt is an object of dispute in arbitration.

If such a restriction lapses on, after or within one year before the normal prescription period will end; one year will be added after the date on which the restriction stopped.

An example to illustrate this:

If a debt becomes due on the 25^th of April 2020, it will prescribe 25^th April 2023 – normal prescription period. On 25^th April 2021, the debt becomes an object of a dispute in arbitration. The dispute is resolved within 6 months - i.e October 2021. This is more than one year before the normal prescription period would have ended, so no amount of time is added.

However, if the dispute lasted until October 2022, this is less than one year before the normal prescription period would have ended; and; therefore, one year is added. So thus, prescription will end October 2024 (add one year from the date on which prescription stops).

Illustrated here below:

[1] 68 of 1969

[2] Section 15 Act 68 of 1969