How Long Can You Legally Be Chased for a Debt in South Africa

The statute of limitations may also be affected by the terms of the contract with your creditor and, if you have moved, by the laws of the state where you are sued. You may want to contact a lawyer to find out how this period is calculated and when the period may have started in relation to your debts. The CFPB has prepared sample letters that you can use to respond to a debt collector. The letters contain tips on how to use them. Sample letters can help you get information, including information about the age of the debt. Letters can also help you set limits or stop further communication or exercise some of your rights. Always keep a copy of your letter for your records. Different laws govern the credit collection process in South Africa. Therefore, debt collection agencies have certain restrictions that they should not violate in the execution of their order. For example, once a debt is time-barred, it is illegal for a debt collection agency to sue you or demand payment of such loans. Section 126B of the National Credit Act (NCA) deals with the application of the limitation period for debts and provides that: When a debt arises from damage caused by the debtor to the creditor, for example as a result of a road accident. Section 126B(1)(b) of the National Credit (Amendment) Act prohibits the collection and sale of prescribed debts.

As in the case studies mentioned, consumers can now find themselves free of expired debt, provided they do not breach the limitation period by acknowledging the debt or paying it after the expiry of the three years. Another complaint filed with the Office of the Credit Ombudsman concerned a consumer who denied data on three bank accounts that were negatively in his profile. The total amount taken into account in the consumer profile for these accounts was R152,290. He pointed out that the accounts were already mandatory, but remained on his credit file. We launched an investigation that led the lender to confirm that all three accounts were indeed mandatory. The consumer profile has been updated. Underwriters of credit reporting agencies are not permitted to submit information relating to prescribed debts. In some states, a partial payment to an old account can restart the period during which you can be sued. Similarly, in some states, sending a written statement confirming that you owe an old debt can restart the period during which you can be sued. If a debt arises from a contract between the debtor and the creditor, for example, a personal loan. (1) (a) No person may sell a claim under a credit agreement to which this Act applies and which is prescribed under the Limitation Act 1969 (Act No.

68 of 1969). Every consumer should know when their debts are time-barred. A debt is prescribed if: If a debt collector sues for a debt that has not been paid longer than the limitation period, you have a defence to the suit. If you are sued and believe that the limitation period has expired, you should consult a lawyer. It is a violation of the Fair Debt Collection Practices Act for a debt collector to sue you or threaten to sue you if they know the limitation period has expired. If a lender or collection agency requires payment of a prescribed debt, ask for it and report it to the Council of Collection Agents. Or contact National Debt Advisors (NDA) today to bail out the debt and we will conduct a thorough investigation to see if your debt can be classified as prescribed. Every day, consumers receive calls, text messages and emails reminding them to pay off their debts.

Some are harassed by debt collectors for handing over debts to debt collection lawyers. Consumers even avoid calls to “private numbers” and calls that appear to come from credit grantors or collection agencies. According to Credit Ombudsman Nicky Lala Mohan, nearly 10 million active credit consumers struggle to repay their debts and prefer to avoid the problem rather than deal with it. One of the main reasons why consumers “hide” from debt is lack of knowledge. “Consumers have no idea what their rights are, what they can complain about and where they can complain,” adds Nicky Lala Mohan. Consumers come to our office complaining that they have been misinformed by the collection agency or credit provider that if a payment of R20 or R50 is made, it would stop the legal process,” adds Lala Mohan. The lender cannot take legal action against the consumer for the debt, adds Mr. Nicky Lala Mohan. Guide: How to check if your name is being audited for debt Many consumers experience a situation similar to Ms. Adam`s, where a lender or debt collector would collect prescribed debts. Some consumers even end up on the blacklist of credit bureaus.

However, if payments or promises to pay have been made during this period, the debt is still valid and the consumer is responsible for it. Often, debt collectors will try to find a way to get you to acknowledge the debt during communication, and if you play in their hands and admit that you know, then they can hold you accountable. While there are ways for creditors to claim this debt, the March 2015 amendments to the National Credit Act make it nearly impossible for collectors to collect these expired debts. Previously, it was up to the consumer to know this as a defence when dealing with debt collectors, and many collectors hoped to get the consumer to pay expired debts, but now there is a more important step in informing consumers of their rights. In most states, the debt itself doesn`t come out or go until you pay it. Under the Fair Credit Reporting Act, debt can typically appear on your credit report for seven years and, in some cases, longer. In South Africa, there is what is called prescribed debt and, simply put, it can be an old debt that has not been recognized for three years or more. It also means a dormant loan for at least three years. Under the National Credit Act, such a loan is required when a lender does not claim payment of the money for a period of three years. However, some loans are called “civil” debts for which you cannot go to jail. For example, if you owe a hospital bill, student loan, or credit card and you haven`t paid, you can`t be jailed for it.

(i) what debt under the Limitation Act 1969 (Act No. 68 of 1969); and What are the consequences of prescribed guilt? Lala Mohan advises consumers to know that not all debts are time-barred after three years. Retail, credit cards, telecommunications, personal loans, gym contracts, cell phones, electricity bills due to the municipality and tuition fees prescribe after three years, however, debts related to real estate loans, funds due to SARS, rates and taxes due to the municipality, Television licences prescribe after 30 years. If the consumer does not request a debt review or debt advice after ten days, it means that the lender can pursue the claim until a court or debt advisor determines that the consumer is not over-indebted.