Page 1 of 2 12 LastLast
Results 1 to 10 of 18

Thread: Debt - How long to collect?

  1. #1
    Full Member
    Join Date
    Apr 2010
    Location
    UGU
    Posts
    54
    Thanks
    1
    Thanked 15 Times in 9 Posts

    Debt - How long to collect?

    How long does a company have to collect debt, ie; can they collect on debt that is 10 years old? I need legal referance if possible
    Thx

  2. #2
    Gold Member
    Join Date
    Jun 2010
    Location
    Johannesburg
    Posts
    832
    Thanks
    180
    Thanked 176 Times in 145 Posts
    I believe debt prescribes after 3 years. So you have that time in which to get a judgement or an admission of debt.

    This does not apply to the Government. Sorry, can't give any legal references.

  3. #3
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    20,979
    Thanks
    3,055
    Thanked 2,462 Times in 2,067 Posts
    Blog Entries
    12
    I'm hoping a lawyer will give the definitive answer on this, but I don't think it's as simple as three years to judgement or AOD. In layman's terms, my understanding would be dormant for three years - ie no progressive step towards realisation.

    Once a step towards collection has been made, the clock starts ticking from zero again.

    In hunting around for something more definitive, I happened to trip over this. When it comes to organs of state, you have to deliver notice of intention to commence legal action within 6 months of the debt becoming due, otherwise the debt expires

    It seems this early escape route from debt doesn't extend to the rest of us, though.
    Last edited by Dave A; 30-Jul-10 at 06:54 AM.
    The trouble with opportunity is it normally comes dressed up as work.

  4. #4
    Platinum Member sterne.law@gmail.com's Avatar
    Join Date
    Oct 2009
    Location
    Durban
    Posts
    1,328
    Thanks
    38
    Thanked 561 Times in 410 Posts
    Blog Entries
    7
    Prescription is the time period in which a claim or action must be brought. It is not the TOTAL time allowed in which to complete the action.
    Hence as Dave says, you have a time period in which to file the first papers. You can apply for condonation, once the time period has expired, but 10 years may be ambitious.

    The relevant act is The Prescription Act 68 of 1969
    CHAPTER III
    PRESCRIPTION OF DEBTS (ss 10-16)
    (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
    (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.

    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

    (1) Subject to the provisions of subsections (2) and (3), prescription shall commence to run as soon as the debt is due
    (2) If the debtor wilfully prevents the creditor from coming to know of the existence of the debt, prescription shall
    not commence to run until the creditor becomes aware of the existence of the debt.
    (3) A debt shall not be deemed to be due until the creditor has knowledge of the identity of the debtor and of the
    facts from which the debt arises: Provided that a creditor shall be deemed to have such knowledge if he could have acquired it by exercising reasonable care.


    There are certain actions which would delay or postpone or alter the time period calculation.
    Last edited by Dave A; 07-Mar-12 at 02:48 PM. Reason: correction
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

  5. Thank given for this post:

    Dave A (31-Jul-10), Martinco (29-Nov-10)

  6. #5
    Gold Member garthu's Avatar
    Join Date
    Dec 2008
    Location
    Midrand
    Posts
    595
    Thanks
    39
    Thanked 65 Times in 55 Posts
    Ok so my understanding then is if i attempt to claim a debt today by sending a statement and notice then the clock starts to 3 years, then if i resend a statement in 1 year with a notice the clock starts from zero again??? IS that correct???
    Garth

    Electric fence Installation : www.midrand-electronics.co.za
    Free Classified Adds : www.bgone.co.za

  7. #6
    Platinum Member sterne.law@gmail.com's Avatar
    Join Date
    Oct 2009
    Location
    Durban
    Posts
    1,328
    Thanks
    38
    Thanked 561 Times in 410 Posts
    Blog Entries
    7
    No. The cause of the action, that being when the debt became due or rather overdue, is when the clock starts. If there is an acknowledgment of the debt, the clock would start again. (A possible back door in)
    If it was possible to keep restarting the clock by giving a statement then prescription would be non existent.
    Depending how much money is at stake, you may want to write this debt off as school fees.
    If you bought the business and the debt was not known to you(ie not on books) then you may have a back door.
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

  8. Thank given for this post:

    BusFact (31-Jul-10), Dave A (02-Aug-10), garthu (01-Aug-10), tec0 (06-Feb-12)

  9. #7
    Moderator IanF's Avatar
    Join Date
    Dec 2007
    Location
    Jhb
    Posts
    2,615
    Thanks
    191
    Thanked 520 Times in 398 Posts
    What happens when the debtor pays something does the clock start again, or even acknowledges that they owe the money.
    Only stress when you can change the outcome!

  10. #8
    Platinum Member sterne.law@gmail.com's Avatar
    Join Date
    Oct 2009
    Location
    Durban
    Posts
    1,328
    Thanks
    38
    Thanked 561 Times in 410 Posts
    Blog Entries
    7
    If there is acknowledgment of the debt, and payment is a form of tacit acknowledgment, then thats when the clock is restarted.

    A common tactic or possible solution is to draw up an acknowledgment of debt with very good terms. The person is either aware of prescription or not, so the offer of an AOD instead of legal action and costs is often accepted. Now the doors open and you can charge through. Of course if the OAD is signed then you cannot proceed for summons until the AOD terms are broken.

    On an aside, an AOD can be made an order of the court, which shortcuts the time and costs of the summons route.
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

  11. Thank given for this post:

    AndyD (05-Aug-10), Dave A (02-Aug-10), IanF (10-Aug-10)

  12. #9
    New Member
    Join Date
    Aug 2010
    Location
    south africa
    Posts
    7
    Thanks
    0
    Thanked 0 Times in 0 Posts

    How long?

    How long?

    I am just trying to understand this correctly.
    I had a bank call me, telling me that I owe them money for a credit card. they said I opened the account in 1998. I don't remember having a credit card with that bank. Besides that, i have not had any dealings with that bank for 10 years. So lets say I did have a credit card. Can they now, ten years later, after having no contact with them, from them, can they tell me I owe them money and I need to pay them?

  13. #10
    New Member
    Join Date
    Aug 2010
    Location
    Pretoria
    Posts
    1
    Thanks
    1
    Thanked 0 Times in 0 Posts

    How long for Student loan before lapse?

    I have a similar question.

    My wife made a student loan for R10000.00 about 6 and a half years ago. She has since completed her studies. Since starting the loan she never heard from the institution during the entire period, until last year October - 6 1/2 years later.

    Her mother wrote a letter enquiring about the fact that the letter requesting payment only came 6 1/2 years later. She did not receive an answer.

    This year in July another letter requesting payment arrived now they want R25000.00 - with interest added.

    Is it not possible that the payment lapsed in 6 1/2 years?

Page 1 of 2 12 LastLast

Similar Threads

  1. [Article] GOVERNMENT NOTICE: COUNCIL FOR DEBT COLLECTORS
    By BBBEE_CompSpec in forum National Credit Act Forum
    Replies: 3
    Last Post: 12-Nov-09, 08:25 PM
  2. DEBT REARRANGEMENT PROCESS
    By Eugene in forum National Credit Act Forum
    Replies: 31
    Last Post: 22-Jun-09, 05:16 PM
  3. [Article] New 'tough love' strategy to get you out of debt
    By QUINN in forum General Business Forum
    Replies: 18
    Last Post: 14-Jun-09, 03:50 PM
  4. [Article] What is Bankruptcy?
    By QUINN in forum General Business Forum
    Replies: 10
    Last Post: 05-Jun-09, 09:46 AM
  5. Functions of a debt counsellor
    By Eugene in forum National Credit Act Forum
    Replies: 0
    Last Post: 20-Jun-07, 08:43 PM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •