Debt Does Not Always Disappear When You Think It Does

A lot of South Africans believe that if they ignore a debt for three years, it vanishes. Some debt collectors know this too, and they are counting on you not understanding exactly how the clock works. This article explains when your debt genuinely prescribes and goes away, when it does not, what that "written off" note on your credit report actually means, and what to do if a hospital or other creditor has come after you for someone else's bill.

Part 1: Prescription of Debt - When Does Debt Actually Expire?

The Three-Year Rule

South African law does allow debts to expire. This is called prescription, and it is governed by the Prescription Act 68 of 1969. The general rule is that most ordinary consumer debts, including personal loans, credit cards, store accounts, and general service debts, prescribe three years after the date on which the debt became due and payable.

Once a debt has fully prescribed, it is legally extinguished. It is not merely unenforceable; it is gone. A creditor cannot take you to court to recover it, and for debts covered by the National Credit Act 34 of 2005 (NCA), section 126B of that Act goes further: it makes it unlawful for a credit provider to sell, continue collecting, or attempt to reactivate a prescribed debt.

However, not all debts prescribe in three years. The Prescription Act sets out different periods for different categories of debt:

Prescription Periods Under the Prescription Act 68 of 1969

3 years:Most consumer debts: personal loans, credit cards, store accounts, utility accounts, ordinary service debts

6 years:Bills of exchange, notarial contracts

15 years:Debts owed to the state

30 years:Mortgage bonds, court judgments, and other secured debts

The thirty-year period for judgments is particularly important. If a creditor has already obtained a court judgment against you, that judgment does not prescribe in three years. It prescribes after thirty years. This is why it matters enormously whether a creditor has simply stopped chasing you, or has already gone to court and obtained an order.

The Clock: When Does It Start, and What Stops It?

Prescription begins running from the date the debt becomes due, meaning the date on which the creditor could first have demanded payment. For most credit agreements, this is the date you first defaulted on a payment.

Here is the part that catches people out: the three-year clock does not run uninterrupted in every case. Under section 14 of the Prescription Act, prescription is interrupted, meaning the clock resets to zero, in two circumstances.

The first is service of legal process. If a creditor issues and serves a summons on you, prescription is interrupted from the date of service, provided the creditor follows through to judgment. If the creditor serves summons but then abandons the action without getting a judgment, the interruption lapses and the clock is treated as if it was never stopped.

Critical: A summons served on you at your last known address is legally valid service, even if you never personally received it. Do not assume that because you did not see a summons, no summons exists.

The second way prescription is interrupted is by acknowledgement of liability by the debtor, under section 14 of the Act. This can be express, such as signing an acknowledgement of debt document, or tacit, such as making a partial payment. If you make even a small payment on an old debt, prescription restarts from that date. If you write an email to a creditor saying you know you owe the amount, prescription restarts. If you answer a debt collector's call and say "I know I owe this, I just cannot pay right now," that may well restart the clock.

Warning: Debt collectors know the prescription rules. Some deliberately contact debtors and encourage them to say or sign things that amount to an acknowledgement of liability. Any acknowledgement, even an informal one, resets the prescription period entirely.

The Creditor's System Flags

Here is something many consumers do not realise: sophisticated credit providers, banks, and debt collection firms use account management systems that flag accounts as they approach the end of the prescription period. This is not coincidence. A creditor who has been passive for two years and eleven months may suddenly issue a summons in the final weeks before the debt prescribes, precisely to interrupt the clock and reset the three years. If you receive a summons or a letter of demand from an old creditor, the timing may be deliberate. Do not ignore it and do not acknowledge the debt without first taking legal advice.

Raising Prescription as a Defence

Under the current Prescription Act, prescription does not automatically protect you; you must raise it as a defence in any court proceedings. For debts governed by the NCA, however, the position is stronger: section 126B makes it unlawful for a credit provider to pursue a prescribed debt at all, regardless of whether you raise it.

The practical advice is this: if you believe a debt has prescribed and a creditor is attempting to collect it, do not simply pay. Get legal advice first. The debt may be legally extinguished. If a creditor takes you to court over a prescribed debt, you can raise prescription in your answering papers and the action should be dismissed.

Part 2: Your Credit Report - What "Written Off" Actually Means

Written Off Does Not Mean Gone

The phrase "written off" on a credit report is one of the most misunderstood terms in South African consumer credit. When a creditor "writes off" a debt, it means the creditor has decided, for internal accounting purposes, that the debt is unlikely to be recovered and has removed it from their active receivables. It is an accounting classification. It does not mean the debt has been waived, forgiven, cancelled, or that you no longer legally owe it.

A creditor who writes off your account can still sell the debt to a third-party debt purchaser, who then has the right to collect it. They can still take legal action against you. They can still list you adversely with a credit bureau. The write-off affects the creditor's books, not your legal obligation.

Adverse Listings: The Rules

When a creditor lists you adversely with a credit bureau, strict rules under the National Credit Act and its regulations apply. Regulation 19 of the NCA Regulations requires that before an adverse listing is loaded, the creditor must first send you a twenty-business-day letter of demand, warning you that the non-payment may result in your credit record being adversely affected, and you must be in arrears for at least three billing cycles. These steps are not optional. If a creditor loads an adverse listing without following this process, the listing is unlawful and must be removed.

NCA Credit Bureau Data Retention Periods

Adverse listings ("written off", "handed over"):1 year, or until the debt is settled in full

Court judgments:5 years, or until paid in full

Debt review / administration order:Until rescinded, or 10 years

Payment profile data:5 years

Prescribed debt:Must be removed; it is unlawful to list or retain prescribed debt (Regulation 19(5))

Getting a Listing Removed

If an adverse listing is on your credit report and you believe it should not be there, the process for disputing it is set out in section 72(3) of the NCA, read with Regulation 20(2). The process is free and is as follows:

• Pull your credit report. You are entitled to one free report per year from each registered credit bureau (TransUnion, Experian, XDS, Compuscan). Review all entries carefully.
• Identify the basis for your dispute: Is the debt prescribed? Was the twenty-business-day notice not given? Is the listing older than the statutory retention period? Is the amount incorrect?
• Submit a written dispute to the credit bureau. Include your ID, proof of residence, and a clear description of your dispute. State explicitly that you do not acknowledge the debt if you believe it is prescribed.
• The credit bureau has 20 business days to investigate. If they cannot provide proof that the listing is lawful, they must remove it. Regulation 19(5) of the NCA specifically prohibits the listing of prescribed debt.
• If the bureau does not act or the creditor refuses to update the listing despite payment or prescription, escalate to the National Credit Regulator (NCR) or the Credit Ombud. As a last resort, you can approach a court for an order compelling removal.

If a debt has been paid in full, the credit provider has seven days to notify the bureau, and the bureau then has seven days to update your report. If they fail to do so, this is a regulatory violation you can report to the NCR.

In Summary

Debt law in South Africa carries more nuance than most people realise, and the gap between what consumers believe and what the law actually says is exactly where collectors and creditors gain the advantage.

Two key points to carry away from this article:

• Prescription is real but fragile. A three-year-old debt may still be alive if you acknowledged it, made any payment, or if the creditor served summons and got a judgment. Once prescribed, it is gone, but getting there requires that nothing interrupted the clock.
• "Written off" means the creditor gave up on collecting, not that you do not owe it. An adverse credit listing under this classification still has real consequences and specific rules govern how long it can stay and how to get it removed.

**At Van Deventer Dowlath & Marx Inc. (VDM), we assist individuals and businesses with debt disputes, credit bureau complaints, and consumer credit matters. If you are uncertain about your position in relation to any debt, speak to us before you pay, sign, or respond.