Understanding Prescription Laws in South Africa
Prescription laws in South Africa are of great importance to both creditors and debtors. It is essential for consumers to be aware of their rights and obligations when it comes to debts, especially with regard to the Prescription Act, Act 68 of 1969.
Prescription refers to the extinguishment of a debt after a certain period of time has elapsed. The time periods for prescription vary depending on the type of debt. For example, mortgage bonds, judgment debts, debts owed to the State, and taxation-imposed debts prescribe after 30 years, while other debts prescribe after 3, 6, or 15 years, as outlined in the Act.
It is crucial to understand when prescription commences. According to Section 12 of the Act, prescription begins once the debt is due. Furthermore, the Act provides for the interruption of prescription, such as in cases where liability has been acknowledged or when judicial interruption occurs through the serving of a summons on a debtor for the debt owed.
The National Credit Amendment Act, which came into operation in March 2015, introduced significant changes, particularly Section 126B(1)(b) of the National Credit Act 34 of 2006 (“the NCA”). This section prohibits the collection or reactivation of a debt under a credit agreement to which the NCA applies, once the debt has been extinguished by prescription under the Prescription Act 1969. This provision also bars the collection of such debts when the consumer raises the defense of prescription in response to a demand.
It is important to note that Section 126B(1)(b) does not apply retrospectively to NCA credit agreements. This means that debts that have already been extinguished by prescription cannot be retrospectively collected upon under the NCA.
For a comprehensive understanding of these laws and their application, individuals are encouraged to refer to the full Prescription Act, as well as the relevant case law, which is available in the library section of the website.
In conclusion, consumers should be well-informed about prescription laws in South Africa to protect their rights and understand their responsibilities regarding debt. With the various provisions and regulations in place, it is essential to stay updated and seek legal advice when necessary.
If you have any questions about debt you currently have, please feel free to reach out to a member of the Libertine Consultants team. We are here to provide you with judgement-free support and advice.
Need advice? We can assist with that too! Submit your inquiry to us via email advisors@libertineconsultants.co.za and we will provide you with sound insights on the best way forward. In the meantime, keep an eye on our YouTube channel to get more practical advice on managing the financial stress of the pandemic.
