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Ask WCLawyer Your Own Question
WCLawyer, Attorney
Category: South Africa Law
Satisfied Customers: 15603
Experience:  L.LB (UOVS)
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I have an outstanding credit card debt dating back a few years

Customer Question

I have an outstanding credit card debt dating back a few years now. I was last in contact with a debt collector in early 2012, wherein I had entered into an agreement to pay a discount amount to the debt by January 2012, which I failed to honour. Since then, I have been contacted by two other debt collectors for the same debt. for these two, I simply asked them to send me proof of the said debt, with proof from the creditor authorising them to collect on behalf of the creditor, and after that, i never heard from both. My question to you you is: do I have any claim towards a prescription of this debt, or should i rather contact the creditor to make payment arrangements with them? I recently applied for a credit facility with my bank and this was turned down, I suspect due to this outstanding debt, even though I have no judgement again me. Regards, KK.
Submitted: 2 years ago.
Category: South Africa Law
Expert:  WCLawyer replied 2 years ago.
Good afternoon.When you say that you had entered into an agreement with the first debt collector, was this in writing?
Customer: replied 2 years ago.
Yes, it was in writing through a lawyer.
Expert:  WCLawyer replied 2 years ago.
Okay, so this would have been somewhere in January 2012, correct? And you did not make any payments on this arrangement?
Customer: replied 2 years ago.
To date, I did not pay a cent towards this debt.
Expert:  WCLawyer replied 2 years ago.
And the date is accurate? You signed the acknowledgement of debt in January 2015. Or, put differently, you definitely signed the document more than three years ago counting back from today?
Expert:  WCLawyer replied 2 years ago.
I will give you very detailed, but very clear information on prescription. On the face of it, however, it would seem as if their claim has become prescribed. Section 10 of the Prescription Act reads as follows:10. Extinction of debts by prescription.—(1) Subject to the provisions of this Chapter and of Chapter IV, a debt shall be extinguished by prescription after the lapse of the period which in terms of the relevant law applies in respect of the prescription of such debt.(2) By the prescription of a principal debt a subsidiary debt which arose from such principal debt shall also be extinguished by prescription.(3) Notwithstanding the provisions of subsections (1) and (2), payment by the debtor of a debt after it has been extinguished by prescription in terms of either of the said subsections, shall be regarded as payment of a debt.This basically means that you cannot claim a debt once it becomes prescribed. Section 11 of the Prescription Act states which periods is applicable. 11. Periods of prescription of debts.—The periods of prescription of debts shall be the following:(a) thirty years in respect of—(i) any debt secured by mortgage bond;(ii) any judgment debt;(iii) any debt in respect of any taxation imposed or levied by or under any law;(iv) any debt owed to the State in respect of any share of the profits, royalties or any similar consideration payable in respect of the right to mine minerals or other substances;(b) fifteen years in respect of any debt owed to the State and arising out of an advance or loan of money or a sale or lease of land by the State to the debtor, unless a longer period applies in respect of the debt in question in terms of paragraph (a);(c) six years in respect of a debt arising from a bill of exchange or other negotiable instrument or from a notarial contract, unless a longer period applies in respect of the debt in question in terms of paragraph (a) or (b);(d) save where an Act of Parliament provides otherwise, three years in respect of any other debt.So, for most debt the period is three years from the date that the debt became due and payable. In other words, three years from the date that you were supposed to have paid.Section 13 state that prescription (the three year period) will not run under the following circumstances:13. Completion of prescription delayed in certain circumstances.—(1) If—(a) the creditor is a minor or is insane or is a person under curatorship or is prevented by superior force including any law or any order of court from interrupting the running of prescription as contemplated in section 15 (1); or(b) the debtor is outside the Republic; or(c) the creditor and debtor are married to each other; or(d) the creditor and debtor are partners and the debt is a debt which arose out of the partnership relationship; or(e) the creditor is a juristic person and the debtor is a member of the governing body of such juristic person; or( f ) the debt is the object of a dispute subjected to arbitration; or(g) the debt is the object of a claim filed against the estate of a debtor who is deceased or against the insolvent estate of the debtor or against a company in liquidation or against an applicant under the Agricultural Credit Act, 1966 (Act No. 28 of 1966); or(h) the creditor or the debtor is deceased and an executor of the estate in question has not yet been appointed; and(i) the relevant period of prescription would, but for the provisions of this subsection, be completed before or on, or within one year after, the day on which the relevant impediment referred to in paragraph (a), (b), (c),(d), (e), ( f ), (g) or (h) has ceased to exist,the period of prescription shall not be completed before a year has elapsed after the day referred to in paragraph (i).(2) A debt which arises from a contract and which would, but for the provisions of this subsection, become prescribed before a reciprocal debt which arises from the same contract becomes prescribed, shall not become prescribed before the reciprocal debt becomes prescribed.Section 14 of the Prescription Act says that Prescription is stopped in the following circumstances:14. Interruption of prescription by acknowledgement of liability.—(1) The running of prescription shall be interrupted by an express or tacit acknowledgement of liability by the debtor.(2) If the running of prescription is interrupted as contemplated in subsection (1), prescription shall commence to run afresh from the day on which the interruption takes place or, if at the time of the interruption or at any time thereafter the parties postpone the due date of the debt, from the date upon which the debt again becomes due.In other words, if you sign an acknowledgment of debt or the Plaintiff had obtained civil judgment against you within that three year period, prescription does not apply.What you can do now, since prescription applies, is inform the creditor that the debt has prescribed. Inform them that you do not intend to sign anything or pay anything. Inform them that if they issue summons, they must do so at your current address and you will defend the summons based on prescription and ask for legal costs against them. Also inform them that listing prescribed debt on a credit bureau is specifically prohibited by the regulations to the National Credit Act and any attempt to list you will result in a defamation of character claim against them.If they continue to harass you, you would be able to obtain an interdict in terms of the Protection from Harassment Act. You can obtain that at your local Magistrates Court. If you make arrangements now with the credit provider, that would revive the debt. So, I recommend that you continue to deny the debt and in the alternative state that it became prescribed.
Expert:  WCLawyer replied 2 years ago.
With regards ***** ***** credit listing: Not every thing listed on a credit bureau needs to be a judgment. You can be listed for what is termed 'adverse information', which would be late payment on your credit card bill or your clothing account and things like that.You cannot, however, be listed for debt that has become prescribed.I hope I have answered all of your questions and addressed all your concerns, but if you have follow up questions before you rate, feel free to ask them at no extra cost. If you are satisfied with the service, kindly rate it positively.
Customer: replied 2 years ago.
I made a mistake with the dates. The agreement was to make the payment by end of January 2013, as we negotiated a settlement amount in the latter months of 2012. Am i now correct in saying the matter has not prescribed? If that is the case, and also taking into consideration, the other two debt collectors who called in-between January 2013 and now, what do I do? Who do i contact, the bank or the original debt collectors, if I should contact them at all? I guess what I am asking is: I want to obtain credit and I suspect this debt is preventing my bank from granting me a credit facility, which I now need.
Expert:  WCLawyer replied 2 years ago.
Unfortunately yes. Since you acknowledged the debt, that would create a new cause of action and that would revive the debt. Obviously, if you signed an acknowledgement of debt for debt that did not exist in the first place, you would still be able to defend, but you would not be able to use prescription as a defense. I suggest that you contact the bank directly if you want to make arrangements, otherwise, you can just wait it out another six months and see if they are going to issue summons (which would stop prescription from running). If they don't issue summons within three years of you acknowledging the debt, they would not be able to claim and the debt would be prescribed.Whether you admit the debt now and make arrangements or whether you wait and see if it is going to become prescribed is, unfortunately, not going to affect your credit record if this is indeed what is holding you back. The listing will remain until the debt is paid in full, or until the debt has become prescribed.
Customer: replied 2 years ago.
Please stop sending further emails asking me to rate you.