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Thread: Debt Review & The Prescription Act

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    Debt Review & The Prescription Act

    Hi all.

    I'm a "noob" here to TFSA. If anyone could please help me with advice?

    In October 2010 I’d undergone Debt Review, to which a court order was granted on the 1st March 2011. Unfortunately due to circumstances beyond my control, I only managed to make 1 payment to the NPDA towards my Debt Review obligations in November 2011. Since then I had made no payments.

    It was not until very recently that I had heard about the Cancellation of Debt - In Terms Of The Prescription Act 68 Of 1969, as well as the National Credit Amendment Act 2014 (NCAA) - The Prescribed Debt Amendment.

    Since the debts have indeed prescribed, what process should I follow to have the listing removed from the credit bureaus and / having the debt review process cancelled / rescinded?

    I have contacted my debt councilor to inquire, and it appears that they are not very clear on what to do in this regard, as they have been hesitant in answering me regarding the exit process.

    I also wish to find out what fees can the debt counselor claim from me to exit the process. I am under the impression that the debt counselors are entitled to a monthly “after care fee”, however since the inception of service they had very little / no after care service towards my case since the court order had been granted.

    I decided to jump the gun and take matters into my own hands, and I had sent out “Prescription Claim Letters” (with much thanks to Vanash Naick) to my creditors which were listed on the court order for debt review via registered post on the 29 July 2016.

    I’m not too sure what route to follow from here on in. Any advice will be greatly appreciated.

    Many Thanks & Regards

    Terrence

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    Quote Originally Posted by TMcG123 View Post
    Since the debts have indeed prescribed...
    Given that there was a court order in 2010, are you certain they have prescribed. Prescription on a judgement for debt is 30 years...
    The trouble with opportunity is it normally comes dressed up as work.

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    In my mind they have prescribed.

    The Paralegal Manual (Published by the Education and Training Unit and the Black Sash - Funded by Cs Mott Foundation), under the “Legal Dictionary Section” defines the following:

    “Court Order” – Is an official order by a judge telling someone to do something or to stop doing something.

    “Judgment“– Is a decision made by judge or magistrate.

    “Default Judgment” – A Judgment is given against someone in a civil claim when they do not come to defend themselves.

    Therefore in my personal opinion / laymen’s interpretation is that a “Debt Review Court Order” is not the same as a civil court “Default Judgement / Judgement” for debt. Also nowhere on the actual court order document is the term or definition of “judgement” typed or written, therefore in my mind prescription should apply.

    According to the Prescription Act 68 of 1969, section 10 (1), a debt is prescribed if:

    1.) You have not acknowledged the debt in the past 3 consecutive years, either in writing or verbally.
    2.) You have not made any payment towards the outstanding amount, nor have you promised to pay.
    3.) The creditor has not summonsed you for this debt within 3 consecutive years.

    My understanding is also that now (as of 19 May 2014) it is illegal to collect on prescribed debts too.

    Act No. 19 of 2014: National Credit Amendment Act, 2014 (Insertion of section 126B in Act 34 of 2005) says:

    The following section is hereby inserted in the principal Act after section 126A:

    ‘‘Application of prescription on debt 126B.
    (1) (a) No person may sell a debt under a credit agreement to which this Act applies and that has been extinguished by prescription under the Prescription Act, 1969 (Act No. 68 of 1969).
    (b) No person may continue the collection of, or re-activate a debt under a credit agreement to which this Act applies—
    (i) which debt has been extinguished by prescription under the Prescription Act, 1969 (Act No. 68 of 1969); and
    (ii) where the consumer raises the defence of prescription, or would reasonably have raised the defence of prescription had the consumer been aware of such a defence, in response to a demand, whether as part of legal proceedings or otherwise.’’.

    In my opinion I have started the process correctly by claiming prescription by serving the creditors “Prescription Claim Letters” to formally establish prescription.

    It is now my understanding that the debt review process will have to be cancelled by means of an application to court to rescind the debt review court order. I have been told that if any of the accounts under the debt review have indeed prescribed, then this will have to be indicated in the court application to cancel the debt review process.

    What I need to find out is the process of how to go about withdrawing from the debt review process after I have approached the court for rescission of the court order, due to the debts being prescribed.

    The NCR states in the “WITHDRAWAL GUIDELINES - 002/2015” under a section “CAN A CONSUMER WITHDRAW FROM DEBT REVIEW PROCESS ONCE A DEBT REVIEW COURT ORDER HAS BEEN OBTAINED?“

    a) Once a debt review court order has been obtained a consumer cannot terminate or withdraw the debt review process, they can however approach the court to rescind the order or apply for an order which declares that the consumer is no longer over-indebted.
    b) Upon receipt of the order, a debt counsellor will notify the credit providers of the withdrawal by means of Form 17.W and update DHS with status G.

    So this is where I’m a little confused on what to do from here since I have contacted my debt councilor to inquire about the exit process due to the prescription issue. Like I said before it appears that they are not very clear on what to do in this regard, as they have been hesitant in answering me regarding the exit process based on the above.

    The question is where to from here and who do I go to?

    Hells Bells…. It’s complicating!

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    I want property and a new car

    good day...

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