What Is Prescribed Debt ?

Prescribed Debt

If you’re looking for information on prescribed debt in South Africa then you’ve come to the right place. Prescribed debt is a legal term that refers to a debt that is no longer legally enforceable because it is too old. In other words, if a debt is prescribed the creditor can no longer take legal action to collect the debt. In this article we’ll cover all the basics of prescribed debt in South Africa, including what it is, how it works and what you can do if you think your debt may be prescribed.

Prescribed Debt in South Africa

Prescribed debt, an increasingly rampant problem in South Africa, has far-reaching consequences for both individuals and the nation as a whole. This arrears of debt can lead to serious financial strain due to the abnormal interest rates and associated late fees. For many citizens, these punitive rates make it difficult to ever become financially solvent again.

The implications of prescribed debt extend beyond mere financial hardship; they also include psychological distress among South Africans who have fallen victim to it. Oftentimes this debt is incurred without full knowledge or understanding on behalf of borrowers, leading them into even further despair once difficulty arises regarding repayment. This combination of negative psychological effects and staggering finances can be utterly crippling for those affected by prescribed debt in South Africa.

The government must take actionable steps to support its people in dissolving their arrears efficiently and equitably. The foundation for emerging from these debts exists in austerity measures such as educational seminars about budgeting skills and forgiveness programs that alleviate some late payments that burden citizens annually with exorbitant amounts due each year on top of the growing base amount owed. Long-term solutions must come from cooperative agreements between political spaces, legislative authorities, and creditors so that sectors are not plunged further into defaulted payment situations than before prescribed debts were regulated under harsh stipulations.

How Does Prescribed Debt Work?

Prescribed debt is an effective tool for managing debt levels and credit score in South Africa. It works by allowing people to make payments on a fraction of their total outstanding debt at reduced interest rates. This means that individuals can pay off their balance more quickly with less pressure on their credit.


Prescribed debt is calculated using a formula, which takes into account the amount of overdue payments, the number of months the person has been in arrears and other factors. Payments are then made over an agreed term ranging from two years up to five years or even longer depending on one’s financial situation. In return for making such payments, individuals receive a reduction in interest rates and fees, providing them with more manageable monthly repayments that make it easier to service the debt.


In addition to reducing current debts through prescribed debt, this process can also benefit future credit prospects as creditors view payment agreements positively during credit evaluations. If used correctly prescribed debt could be arguably one of the most powerful tools for controlling personal finances in South Africa today.

After How Long Is a Debt Prescribed in South Africa?

In South Africa, most debts are prescribed after three years of no activity or acknowledgement from the debtor. During this period, creditors have limited rights to pursue the debt; however, if contact is made with either an instalment for payment or otherwise acknowledging the debt during this time frame, prescription will be halted and creditors can still pursue repayment.


For certain types of debt, such as tax and mortgage debts, the three-year prescription does not apply and creditors can enforce repayment for a much longer period. It is therefore important for South Africans to understand the legal implications of their debts before making any payments or acknowledgements that may unintentionally halt prescription.

When Is Debt Prescribed in South Africa?

In South Africa, debt is prescribed when it reaches a certain date – typically 3 years from the date at which the debt was due for payment and not when it is paid off. A debtor who has defaulted on a loan may have their outstanding debts become prescribed after a period of 3 years or longer, depending on certain conditions in terms of the National Credit Act (NCA). Prescription does not erase financial obligations acquired before that date. It just serves to point out that legal actions will no longer be recognized as valid if made past that particular point in time.


Prescription laws may offer some form of relief to people facing financial difficulties as they allow them to make more responsible financial choices without fear of prosecution if they fail to make payments beyond the three-year cut off point. To find out more about prescription in South Africa and what rights you hold as creditor or debtor, seeking professional guidance with regards to understanding your rights and obligations based upon the NCA is highly advisable.

What Happens If Debt Is Prescribed?

In South Africa debt prescription is a legal process that allows individuals to be forgiven of their financial obligations when certain requirements have been met. Prescribed debt is essentially a form of financial relief as it enables individuals who are overwhelmed by debt to commence fresh without having to worry about repaying debts that were incurred in the past.

Prescription involves two distinct entities — the creditor and the debtor. The creditor needs to prove that they took reasonable steps to pursue payment but without success so that their claim could be prescribed (cancelled). On the other hand, the debtor needs to meet certain qualification criteria in order for their debt(s) to become prescribed – such as paying all unavoidable maintenance expenses upfront and no contact with creditors or collection agencies for an extended period of time.

When debt becomes prescribed, it means comprehensive freedom from any financial obligations pertaining thereto, making it safe for individuals living in South Africa to manage and rebuild their finances free from fear of future consequence. However, although this process occurs all within the framework of law, there are risks associated with it due mainly its non-reversible nature; once a debt has been prescribed under this act, it cannot be re-instated by creditors even if sufficient funds become available at some point in future.

How to Check If My Debt Is Prescribed?

If you’re living or working in South Africa, there may come a time when it is necessary to check if your debt is prescribed. Fortunately, the National Credit Regulator in South Africa has made it relatively straightforward to ascertain if your specific debt situation has been prescribed.

Prescription is the legal process by which an unsecured debt legally expires over a certain period of time, usually three years, which then renders that particular debt untraceable and unenforceable. Knowing whether or not your debts are prescribed can be incredibly important in protecting yourself from creditor claims and it is highly recommended you take the time to check as soon as possible if you haven’t already done so.

In order to check if your debts have been prescribed, get in contact with any company who holds proof of a credit agreement between yourself and any creditors – such as banks through which you may have acquired loans or credit cards – and request a written confirmation stating that they either acknowledge individual loans/debts or don’t object to the prescription of all existing liabilities. Once provided with this information verify it with the concerned court registry office; alternatively consideration can also be given towards seeking independent legal advice on matters concerning prescription status.

How to Prove Prescribed Debt?

Proving prescribed debt can be an intimidating task for the general population of South Africa, as it requires providing evidence to a court in order to reduce or write-off certain liabilities. In order to prove prescribed debt, individuals should take a number of steps in order to present accurate and compelling information.

First and foremost, individuals should compile all relevant financial documents such as credit agreements, bank statements and proof of income. By providing reliable evidence that demonstrates both their financial history and current ability to make payments, applicants have the best chance of securing the desired results.

In addition to presenting accurate documentation in court proceedings individuals should also familiarise themselves with South African legal regulations governing prescribed debt laws. Understanding these laws is essential for building an effective defence strategy that outlines why they are unable not pay outstanding debts. Through cultivating familiarity with legal regulations and preparing strong evidence packages based on supporting documentation, individuals have the best opportunity possible when seeking reduced liability from creditors within a given jurisdiction.

Prescribed Debt Letter

Prescribed debt is a major problem for many South African households, with financial strain weighing heavily on their lifestyles. Writing a prescribed debt letter is one of the tools available to help individuals address and reduce their outstanding debts.

A prescribed debt letter clearly outlines the debts that an individual or family holds, in order to provide creditors with all the necessary details needed to take further action. It also serves as legal notification that you are unable to make payments on your current loans and are looking for debt relief.

Invoking the provisions of the National Credit Act and asking creditors to assist with a payment plan can be stressful, which underscores how important it is for people to carefully draft this type of document. Clear but concise language should be used throughout so that it doesn’t confuse or overwhelm creditors when they receive it. Establishing an open dialogue in good faith can help lead towards negotiation and finding suitable solutions going forward.

By articulating genuine concerns in a way that’s both logical and informative, consumers have greater chances of understanding their rights when challenging creditors about excess charges or fees associated with debts beyond their means. In turn, this gives them stronger bargaining power when negotiating equitable arrangements acceptable by all parties involved.

How to Apply for Prescribed Debt?

Individuals struggling with debt in South Africa have a number of opportunities to gain relief in the form of prescribed debt. This process, which is regulated by the National Credit Regulator (NCR), allows people to reduce their debt obligations without needing to declare bankruptcy. To apply for prescribed debt, individuals must demonstrate a lack of ability to pay their monthly payments and prove that they cannot feasibly restructure their debts through other means.

Applying for prescribed debt requires following a series of steps outlined by the NCR. These include filing an application with the NCR, providing proof of financial containment and supplying various forms attesting to one’s income and expense history. After this documentation is submitted, an assessment will be made by a reviewer on whether or not an individual qualifies for prescribed debt, based on any extenuating circumstances that would make restructuring regular debts impractical or unfeasible. If approved, all excess indebtedness will be cancelled and charges adjusted accordingly.

The process does not preclude credit providers from taking legal action against applicants granted prescribed debt if it believes that it was fraudulently obtained in any manner whatsoever; however this occurrence is rare as long as all documentation submitted during the process are accurate and complete. For those facing financial hardship in South Africa, applying for prescribed services can provide much-needed relief from unmanageable debts without having to resort bankruptcy proceedings.

Prescribed Debt on Credit Report?

Prescribed debt is a major concern among South African households. When incurred debt is not paid down on time, it may be classified as a prescribed debt and this can have long-lasting repercussions including being listed on one’s credit bureau report. This type of debt can be financially debilitating and lead to further financial hardship if not managed properly.

Under South African law, an account holder who fails to pay their prescribed debt for three or more consecutive months will face the possibility of their credit report being adversely affected. Additionally, with some lenders, failure to resolve the issue may result in additional legal consequences such as repossession of assets or higher interest charges when taking out new financial products.

The best way to avoid falling into a cycle of prescribed debt is through proper financial planning and organisation. Creating realistic budgets and sticking to repayment plans that are affordable within your current salary is key to staying ahead of your debts while also reaping the eventual rewards such as better access to credit products at competitive rates later down the line.

Debt Prescription Period

Debt prescription is an important concept in South African consumer law and cannot be overlooked. The debt prescription period, which generally amounts to three years, is the timeframe during which a creditor can take a debtor to court in order to take remedial action against him/her as a consequence of breach of contract.

The importance of understanding the debt prescription period lies in the fact that once this period has lapsed, all rights and obligations arising from such agreements cease to exist; creditors who wait until after this time has passed are not entitled by law any longer to receive their due from the debtor. On the flip side however, there are certain conditions that can restart or suspend the debt prescription period for both creditors and debtors alike.

In order for consumers to stay atop of these shifting conditions and effectively manage their existing debts, it is essential that they become aware of these limitations with regards to debt prescription periods. It can be hard for individuals on limited incomes – specifically those in South Africa where poverty levels remain especially high – to keep up with payments on overdue accounts, but knowledge about how long a creditor has before they cannot pursue legal action will help manage situations more constructively.

Can a Prescribed Debt Be Revived?

Prescribed debt was implemented as part of South African law in 2019 to address the growing problem of debt that is deemed unpayable. This category of debts, due to its age and amount owed, is considered beyond repair and therefore has been written off by credit providers. Medical care bills, unpaid rent arrears and student loan debts are all examples of prescribed debt.

The good news is that it may still be possible to revive a prescribed debt in certain cases. New legislation enacted in 2020 enables creditors to reactivate such debts if specific criteria are met – this includes providing proof of an ability to pay or demonstrating a willingness to make payment arrangements with no guarantee that these payments will be accepted. It is also essential for any creditor who wishes to proceed with reviving a prescribed debt to gain permission from the court for each case separately.

As challenging as it may seem, there could be hope for those struggling under the weight of their prescribed debts because there are avenues available which provide the opportunity for revival if desired – but taking the necessary steps must be carefully considered first.


What Qualifies as Prescribed Debt?

Prescribed debt refers to debt that is subject to a set of special rules governing legal action in the event of non-payment. Under South African law, qualifying debts are ‘prescribed’ meaning that an individual debtor retains very limited rights for repayment periods, wage garnishments and legal costs.

In general, prescribed debt consists of any money borrowed from individuals or firms which has not been repaid within 30 days or more after the due date. This includes amounts owing to credit providers such as retail stores (on lay-by arrangements), banks (car loans and mortgages), loan sharks, clothing stores offering credit plans and micro lenders like stokvels. Additionally it extends to unpaid utility bills such as electricity, telephone and water accounts as well as outstanding court fines from traffic violations or criminal convictions.

It is important for individuals in South Africa to be aware of the different categories of prescribed debts so they can make informed decisions about managing their finances responsibly whenever possible.


Final Conclusion

Living with Prescribed Debt in South Africa can be a daunting prospect especially if you don’t know the answers to all of these questions.

Fortunately, understanding and managing your prescribed debt is simpler than it may seem. With an increased awareness of how prescribed debt works, when it occurs and what happens when it does occur, South Africans have access to an invaluable resource for financial security and stability.

If you have any further questions about prescription debts or need more detailed assistance on this subject matter please contact us and we will call you back and assist you with any questions that arise—we look forward to hearing from you!


  1. The Prescription Act: This act is the primary legislation that determines when debt becomes prescribed in South Africa. You can find a copy of the act here: http://www.gov.za/documents/prescription-act-no-68-1969

  2. National Credit Act: The National Credit Act is another important piece of legislation that deals with debt in South Africa. It includes provisions related to the prescription of debt and the rights of creditors and debtors. You can find a copy of the act here: http://www.gov.za/documents/national-credit-act-no-34-2005

  3. Credit Ombud: The Credit Ombud is an independent organization that helps to resolve disputes between creditors and debtors in South Africa. Their website includes information on topics such as prescribed debt and how to manage debt: https://www.creditombud.org.za/

  4. National Debt Mediation Association: The National Debt Mediation Association is another organization that provides resources and assistance to individuals dealing with debt in South Africa. Their website includes information on prescribed debt and other topics related to debt management: https://www.ndma.org.za/

  5. National Consumer Tribunal: The National Consumer Tribunal is a government body that deals with disputes between consumers and credit providers in South Africa. Their website includes information on topics such as prescribed debt and how to resolve disputes with creditors: http://www.thenct.org.za/


Frequently Asked Questions

What is prescribed debt?

Prescribed debt is debt that is no longer legally enforceable due to the passage of time. In South Africa the Prescription Act determines when debt becomes prescribed.

2. What happens if my debt becomes prescribed?

If your debt becomes prescribed the creditor can no longer take legal action to recover the debt. However, the creditor may still try to collect the debt through other means, such as contacting you or reporting the debt to a credit bureau.

3. Are There Alternatives To Prescribed Debt?

Prescribed debt is debt that has been outstanding for more than three years and has not been serviced. If you’re struggling to pay off your debt then you may need to consider getting a prescription letter. However, there are also some alternatives to prescribed debt that you should consider.

Here’s a list of four alternatives that you can explore to avoid prescribed debt:

1. Debt Consolidation – Debt consolidation is a great way to simplify your debt. It involves taking out a loan to pay off all your existing debt so that you have only one payment to make each month.

2. Debt Restructuring – This involves negotiating with your creditors to restructure your debt. You can work with your creditors to come up with a payment plan that will make it easier for you to pay off your debt.

3. Debt Review – If you’re struggling to pay off your debt, then you may need to consider getting a debt review. This involves getting a debt counsellor to review your finances and help you come up with a plan to pay off your debt.

4. Debt Relief – If you’re unable to pay off your debt then you may be able to get debt relief. This involves getting help from a third party to negotiate with your creditors and come up with a payment plan that will make it easier for you to pay off your debt.

These are just a few alternatives to prescribed debt that you can explore. Before you make any decisions, it’s important to talk to a financial advisor or a debt counsellor who can help you assess your situation and come up with the best solution for you.

No matter what you decide to do it’s important to remember that taking control of your debt is the key to a brighter financial future. With the right plan in place you can be sure to get back on the right track and start living a debt-free life.

4. Can prescribed debt be revived?

Prescribed debt can be revived if the creditor and debtor agree to extend the prescription period or if the debtor makes a payment on the debt.

5. Where can I get help with managing my debt?

There are a number of organizations in South Africa that can provide assistance with managing debt such as the Credit Ombud, the National Debt Mediation Association and the National Consumer Tribunal. These organizations can provide resources and assistance with issues such as prescribed debt and resolving disputes with creditors. We can also assist you. Simply contact us and we will call you back.