Some Debts You Don’t Actually Have Pay – Prescribed Debt

Some Debts You Don’t Actually Have Pay

Did you know that there are some debts that you may have incurred, that you are not legally required to pay anymore!

Do get my wrong, I’m not trying to encourage you to just stop paying your all debts. But there are some debts which you are simply not bound to pay any longer – and you’ll still be within you legal right to do so.

You most probably have not heard about it before, but there is something known as prescribed debt.

What is a prescribed debt?

According to the Prescription Act a debt is prescribed, if:

  • in the past three years, you have not made any payment towards settling a debt
  • acknowledged owing the debt in any way – including over the phone
  • you have not agreed to pay it, or been summonsed in respect of it

You can use this as a defence when asked to pay a prescribed debt.

Prescribed Debt and Debt Collectors

In many cases, the debt has been written off by the initial credit provider, and bought over by debt collectors.


Here’s the thing – it is perfectly legal for a debt collector or attorney to demand payment from you for a prescribed debt, and if you cave in to the harassment and pay it, you can’t raise the defence of prescription afterwards.

If you are face with this situation do not admit you opened the account, do not admit that there may have been a small balance owing, do not admit that you did not check whether the account had been fully paid. Rather tell the person or collection agent that you do not owe anything and that they should contact your attorney if they wish to pursue the matter.

Always speak to an attorney before admitting liability of any old debt – could be savings yourself thousands.

Get A Loan While Under Debt Review

Get A Loan While Under Debt Review

Is it possible to get a loan while under debt review?

If you are one of the thousands of people undergoing debt review ( also known as Debt Counselling), you’ll know that the debt counselling process doesn’t give you total financial relief from your debts.

Depending on the fluctuations in your income, you may find that you’ll need extra finance to meet your new commitments.

The debt review process is governed by the law in terms of the National Credit Act and enforced by the National Credit Regulator. This means that if can be very difficult to get a loan while under debt review. Especially an unsecured personal loan or credit card account.

The first step to take if you’re feeling the pressure with mounting debts, or lack of cash flow is to sit down and analyse your financial situation yourself. Double check all your income flows and all your payments. In fact, do a full household budget, and see if you have anything leftover that you can use to get yourself out of your current situation.

If you don’t see anyway out of it, in the near future, you can always apply for a lifeline loan or a payday loan. There are companies out there who will provide you with finance, and you will be able to immediate cash as long as you are employed. You may need to provide some sort of security for the loan, and will have to provide some proof income too.

While completing the loan application, make sure you check it out to thoroughly and make sure that the loan repayments are in accordance with what you can afford. The interest rate will definitely be much higher that that of a normal mainstream bank.

In conclusion. Yes! You can get a loan while under debt review. You will be able to get a loan from some lenders you there who are not the mainstream banks, but the trade-off is that you’ll have to settle for a higher interest rate and perhaps the loan repayment terms will a lot shorter too.

Before signing for anything, check out the agreement, make sure you can afford the repayments and you’ll have you money quickly.

Note: It is advisable to be very careful before committing to such a loan as it will probably come at a higher than normal interest rate.

The Debt Counselling Process Explained

What is the full debt counselling process?

There are currently a large number of active debt counsellors in South Africa, who are able to provide you with a debt counselling service.

The first step your advisor will take is to try to find out why you have gotten yourself into trouble with your debts. From that point they will then begin working out a plan as to what the best debt solution plan would be.

In general, about 95% of people who approach a debt counsellor for assistance are likely to go through the counselling process. This is a true sign of the immense value of this new service.

The second step in the process…

Debt Counselling Can Help You Improve Bad Records, And Get You Back On Your Feet Again

Over 9 million South Africans have bed credit records, yet only about 2 percent of them are actually using the Debt Counselling process to assist them in managing their accounts.

According to the Debt Counsellors Association of South Africa (DCASA) since debt counseling was introduced to South Africa in 2007, only about 300 000 consumers have applied for the service.

But, not all applicants will be eligible to the debt counseling process, of the 300 000 that have applied only 150 000 are actually in the process. At least 50% of all applicants are being rejected currently, have terminated the process, or will withdraw.

This initiative can do much to improve your credit standing and reduce your bad debts. And, while you are in debt counseling you will be protected from repossession and judgements being served to you by various creditors.

Remember, that while you are under Debt Review or Debt Counselling, you will not be able to secure a home loan, or get any other large loan for a short period. But, that should not deter you from looking for Rent To Own properties and houses.

Find out more about Rent-to-Buy Homes

10 Questions To Ask Debt Counsellors Up Front

Debt Counsellors are assisting many thousands of South Africans to lower their monthly expenses, pay off their debts and protect them from legal action and bank repossession. But, not all counsellors are asking in the full interest of their clients. Cape Town-based Christoph Bornman was stripped of his registration as a debt counsellor for charging his clients illegal additional fees.

Protect yourself from winding up with an incompetent or unethical debt counsellor but asking these key questions upfront.

  1. How does the debt review process work?
  2. The purpose of asking this question is to establish how the debt counsellor operates and if they follow the process or take shortcuts.

  3. What’s your registration number?
  4. In terms of the NCA, debt counsellors must be registered by the regulator. To verify a debt counsellor’s registration number – known as an NCRDC number – phone the NCR call centre on 0860 627 627.

  5. Are you a member of the Debt Counsellors Association?
  6. Which payment distribution agency do you use?
  7. You should only ever use the services of a debt counsellor who works with a payment distribution agency (PDA) that is accredited

  8. Do you use an accredited debt counselling system?
  9. Good debt counsellors use software systems to help them determine your level of indebtedness

  10. Are you being investigated by the NCR?
  11. Do you follow the NCR Task Team restructuring rules?
  12. Is your fee structure in line with NCR guidelines?
  13. In terms of the NCR’s fee guidelines, a debt counsellor can charge you an application fee, a rejection fee, a debt counselling fee (referred to as a restructuring fee), and a monthly after-care fee.

  14. Which attorney would you use to represent me in court?
  15. Are you planning to leave the industry?
  16. If a debt counsellor is planning to leave the industry or sell his or her book, you have a right to be informed of this because it can interrupt the service that you receive and affect you adversely.