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Our offices have in the past few weeks seen various clients that are being hounded by creditors over debts that seem to have been entered into a very long time ago, or even debt that was never agreed too.
Most people just ask us:
"Can they claim this after so long?"
The answer is a resounding "Maybe".
In terms of our law claims prescribe after certain periods. Meaning that if you do not claim your debts within a certain time period, you may stand the chance of losing the right to claim it.
This is, of course, great news to debtors and awful news to creditors. Unfortunately, we can't keep everyone happy all of the time :)
The prescription act 68 of 1969 at section 10(1) states:
"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."
The above is just a complicated way of saying if you don't claim your money within a reasonable time, you won't be claiming it at all.
Of course, there are exceptions and certain debts have longer periods for prescription, but as a rule of thumb the prescription of debts takes place 3 years after the date that the money became due and payable.
This does not mean that it always applies in a 3 year period. Certain exceptions are alive and well. You could, theoretically, become debt free of mortgage, if the bank doesn't claim within 30 years (THIRTY YEARS!!!) but we know that the bank will take your house, car and even your apples and grapes if you dare to skip payments.
It is very important that debtors are aware that they should always obtain legal advice before entering into a payment arrangement with a creditor as the claim might have become prescribed and you could be paying a debt that is unenforceable and therefore not payable.
Creditors should be sure of when debts become payable and more than that the creditor should ensure that his/her/its debts do not prescribe and that the relevant laws have been complied with.
Have a great weekend?
- Du Bruyn Attorneys
