Debt: Legally cancelling a debt over 3 years old

[patrick1]

[B]Please find the definition of prescription below: 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 a fresh 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. Arrangements were made on the account on the following dates: 30122006 730.00 PROMISE TO PAY 0101200706012007 730.00 PROMISE TO PAY 0801200728022007 360.00 PROMISE TO PAY 0203200712062007 400.00 PROMISE TO PAY 14062007 Kindly note that payments have been recorded on the following dates which interrupts the prescription claim. 13092012 03:30 T769 11092012 300.00 PAYMENT 04102012 02:57 T769 02102012 300.00 PAYMENT22022013 01:56 T769 20022013 400.00 PAYMENT what does this mean
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.
if i paid anything after three years is it in full and does prescription start over this law is 2 sided

[Dave A]

My Note: I've tried to restructure the above post into something more readable. I can't guarantee the accuracy of my interpretation, but it makes more sense than what Patrick put up.

Please find the definition of prescription below:

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 a fresh 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.

Arrangements were made on the account on the following dates:
30122006 730.00 PROMISE TO PAY 01012007
06012007 730.00 PROMISE TO PAY 08012007
28022007 360.00 PROMISE TO PAY 02032007
12062007 400.00 PROMISE TO PAY 14062007

Kindly note that payments have been recorded on the following dates which interrupts the prescription claim.
13092012 03:30 T769 11092012 300.00 PAYMENT
04102012 02:57 T769 02102012 300.00 PAYMENT
22022013 01:56 T769 20022013 400.00 PAYMENT

what does this mean

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.

if i paid anything after three years is it in full and does prescription start over

this law is 2 sided

[Citizen X]

My Note: I've tried to restructure the above post into something more readable. I can't guarantee the accuracy of my interpretation, but it makes more sense than what Patrick put up.

Please find the definition of prescription below:

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 a fresh 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.

Arrangements were made on the account on the following dates:
30122006 730.00 PROMISE TO PAY 01012007
06012007 730.00 PROMISE TO PAY 08012007
28022007 360.00 PROMISE TO PAY 02032007
12062007 400.00 PROMISE TO PAY 14062007

Kindly note that payments have been recorded on the following dates which interrupts the prescription claim.
13092012 03:30 T769 11092012 300.00 PAYMENT
04102012 02:57 T769 02102012 300.00 PAYMENT
22022013 01:56 T769 20022013 400.00 PAYMENT

what does this mean

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.

if i paid anything after three years is it in full and does prescription start over

this law is 2 sided

Good morning Boss,

Yes, it does make more sense this way, in that I can now see clearly where Patrick’s problem lies.

Good morning Patrick,

I would firstly like to impress upon you that I understand your frustration! You feel as though you were robbed i.e. had it not been for certain payments, your debt would have been eligible for extinctive prescription!

Allow me to explain as follows

Section 10 sets the basis for extinctive prescription

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.

There are different prescription periods. The vast majority of our debts prescribe in 3 years. This means that the law allows the creditor to sue out summons (judicial process) within 3 years from the date that the debt becomes due and payable. The debt becomes due and payable on the date which you fail to pay your debt. Prescription is actually there to punish a creditor for not suing out summons within the prescribed period. So should they sue out summons after this 3 year period, you may enter an appearance, file a plea on merits and a special plea of prescription which will completely destroy their action as their claim is prescribed in law. Why then claim extinctive prescription directly from the creditor? Simply because the creditor is not going to court to demand payment but is demanding payment directly from you, so you responding to the creditor by saying that the debt is now prescribed.

The periods of prescription of debts shall be the followingsave where an Act of Parliament provides otherwise, three years in respect of any other debt

Unless certain events interrupt prescription and cause prescription to run afresh namely actual payments and acknowledgement of debt

The running of prescription shall be interrupted by an express or tacit acknowledgement of liability by the debtor.

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.

In your individual case one need no longer to look at the acknowledgement of debt but rather your last payment which was on 22 February 2013. The creditor now has 3 years from this date 22 February 2013 to demand payment on the debt and/or sue out summons

22022013 01:56 T769 20022013 400.00 PAYMENT

[kent]

Hi Vanesh

I took out loan in 2008/11/15 and due 2010/04/30, which from 09/05/2009 debits went unpaid as I was no longer working.I had no further correspondance with them and in 23/05/2012 send them a prescription letter claiming debt as preascribed, and asked that they send me statements to support my claim
The debt however still appeared and I lodged a claim with Transunion, who after 20 days came back saying creditor has not responded and removed the listing.

However, when I applied for credit recently, was told that one of my accounts is 9 months in arrears, checked XDS and experian, whi acknowledged that the listing is stll on my profile
XDS investigated, but came back after 2 days saying the creditor rejects the debt has prescribed and said I was liaing with them within the 3 years.
They concluded the case without asking for any proof of such communication and I was told the creditor's feedback was final

I then send email asking for the proof and was told the following
2010/04/06 - a call was attempted no response, on the same day it was established that the client has left the company,
2010/04/22 - received a debt review application,
2012/05/ 23 - A call was received from yourself enquiring about the account,
2012/05/23 – another call was received from yourself requesting a settlement quotation, the document was sent to your current settlement amount

So, within the 5 years the debt is listed, they made 1 attempt to contact me
The debt review application was not done by me, but by my wife who gave my id number without me knowing and also was cancelled and no documents or contact was made after she provided id number, as she was told that about dishonest practices where debt review is concerned
The call I made was after sending the prescription letter and to inform them that debt prescribed and need statements to support this

I have lodged a dispute with ombudsman,as the interst charged is double the amount allegedly loaned.

Has the debt prescribed?

[Citizen X]

Hi Vanesh

I took out loan in 2008/11/15 and due 2010/04/30, which from 09/05/2009 debits went unpaid as I was no longer working.I had no further correspondance with them and in 23/05/2012 send them a prescription letter claiming debt as preascribed, and asked that they send me statements to support my claim
The debt however still appeared and I lodged a claim with Transunion, who after 20 days came back saying creditor has not responded and removed the listing.

However, when I applied for credit recently, was told that one of my accounts is 9 months in arrears, checked XDS and experian, whi acknowledged that the listing is stll on my profile
XDS investigated, but came back after 2 days saying the creditor rejects the debt has prescribed and said I was liaing with them within the 3 years.
They concluded the case without asking for any proof of such communication and I was told the creditor's feedback was final

I then send email asking for the proof and was told the following
2010/04/06 - a call was attempted no response, on the same day it was established that the client has left the company,
2010/04/22 - received a debt review application,
2012/05/ 23 - A call was received from yourself enquiring about the account,
2012/05/23 – another call was received from yourself requesting a settlement quotation, the document was sent to your current settlement amount

So, within the 5 years the debt is listed, they made 1 attempt to contact me
The debt review application was not done by me, but by my wife who gave my id number without me knowing and also was cancelled and no documents or contact was made after she provided id number, as she was told that about dishonest practices where debt review is concerned
The call I made was after sending the prescription letter and to inform them that debt prescribed and need statements to support this

I have lodged a dispute with ombudsman,as the interst charged is double the amount allegedly loaned.

Has the debt prescribed?

Good morning Kent,

I'm terribly sorry that you going through such an ordeal for a prescribed debt! Based upon information that you provide the debt prescribed on 9 May 2012 and you have claimed prescription. The confusion that they experiencing is with what interupts prescription. Only judicial process interupts prescription not a mere letter of demand or a call. You indicate that you have not acknowledged debt and that though there was debt review, no payments were made and further that this was cancelled. Since debt review does prevent a creditor from demanding payment, this initself, is not sound reason for them to reject your claim. IN terms of the NCA they were obliged to give notice to terminate debt review, which, i take they did not
1. I just found out that one needn't place legislation in quotation marks since it is not copywrite! So

15 Judicial interruption of prescription
(1) The running of prescription shall, subject to the provisions of subsection (2), be
5
interrupted by the service on the debtor of any process whereby the creditor claims payment of the debt.
(2) Unless the debtor acknowledges liability, the interruption of prescription in terms of
subsection (1) shall lapse, and the running of prescription shall not be deemed to have been
interrupted, if the creditor does not successfully prosecute his claim under the process in question to final judgment or if he does so prosecute his claim but abandons the judgment or the judgment is set aside.
(3) If the running of the prescription is interrupted as contemplated in subsection (1) and
the debtor acknowledges liability, and the creditor does not prosecute his claim to final
judgment, prescription shall commence to run a-fresh from the day on which the debtor
acknowledges liability or, if at the time when the debtor acknowledges liability or at any time thereafter the parties postpone the due date of the debt, from the day upon which the debt again becomes due.
(4) If the running of prescription is interrupted as contemplated in subsection (1) and the
creditor successfully prosecutes his claim under the process in question to final judgment and the interruption does not lapse in terms of subsection (2), prescription shall commence to run afresh on the day on which the judgment of the court becomes executable.
(5) If any person is joined as a defendant on his own application, the process whereby the
creditor claims payment of the debt shall be deemed to have been served on such person on the date of such joinder.
(6) For the purposes of this section, 'process' includes a petition, a notice of motion, a rule
nisi, a pleading in reconvention, a third party notice referred to in any rule of court, and any document whereby legal proceedings are commenced

So you need to make it clear to them that a call, or letter from them is not judicial process! Failing which challenge them to sue out summons and instruct your attorney to file a plea on merits, a special plea of preciption.

Here I need the astute logical skils of my fellow TFSA members to assist in reasoning this out..

[Dave A]

My concern is that debt review application. It might well be deemed an acknowledgement of debt as it must have been included in a list of creditors given to the debt counsellor. Probably worth pointing out that even if so interpreted, prescription becomes available on 22 April 2013 - not that far away.

The other aspect with this situation is in terms of in duplum, the sum of interest and collection costs raised may not exceed the quantum of the capital amount due at the time of default. More on in duplum here if it proves to be a relevant issue for you.

[kent]

Hi Dave

Thanks for the feedback.

I spoke to my wife again and she said that all contact she had with the debt review company was when she provided id numbers. No furher contact was made (i.e no documents was signed, no payment, no calls etc )

Can this still be viewed as a valid debt administrative application?

Also, Was the debt collector legaly able to view and access my credit history, without my impilicit consent?

And why does one credit bureau remove the listing and the others not?


Regards

[Dave A]

Kent, I gently suggest some bridges should only be crossed when you arrive at them. Based on current form, not much is going to happen between now and 22nd April when the issue of whether or not the debt review application could be deemed an AOD becomes moot.

The only reason I raised it at all is to indicate you might be in a more assured position to press for closure after 22nd April. Why test the line when you don't have to.

[Citizen X]

Hi Dave

Thanks for the feedback.

I spoke to my wife again and she said that all contact she had with the debt review company was when she provided id numbers. No furher contact was made (i.e no documents was signed, no payment, no calls etc )

Can this still be viewed as a valid debt administrative application?

Also, Was the debt collector legaly able to view and access my credit history, without my impilicit consent?

And why does one credit bureau remove the listing and the others not?


Regards

The debt review argument from the creditor's perspective normally goes like this, we couldn't act on collecting the debt becuase you were under debt review, however, the onus is on the creditor is give notice to terminate debt review when payment is not received. Indeed, there are a few areas that need some arguing around and there is some risk but you do have a good case based on extinctive prescription...

[Gummy1]

hi, I would like to know about school fees if that also falls under the 3 year? According to one debt collector it does not and you stay liable for the rest of your life.

[Citizen X]

hi, I would like to know about school fees if that also falls under the 3 year? According to one debt collector it does not and you stay liable for the rest of your life.

A very good afternoon to you Gummy1,

School fees are not ‘taxation, neither are they a 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; nor are they 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.


As far as I’m concern the three year prescription period is applicable..

Might I suggest that you follow this link for more detailed information:

http://www.theforumsa.co.za/forums/s...plea?highlight=

[Citizen X]

Frequently asked question(In a scenario):

I have just received a summons, this after having received a final letter of demand. The summons calls upon me to either appearance an appearance or consent to judgment . This matter related to a prescribed debt, a debt which is order than three(3) years, calculated as such from the date of the last payment. For whatever reason you ignored the demand letter, but summons has just been served, you have a deadline within which to file certain documents(pleadings).

You can do one of three things:

1. Defend your-self on the matter by entering a notice of intention to defend, drafting a plea on merits as well as a special plea of prescription in the prescribed manner. This entails serving these documents to both the plaintiff and the clerk of courts. With this pleading(plea on merits and special plea of prescription), your pleading has the intense power of destroying the entire action!(If you just ignore this, you give the creditor an opportunity to obtain default judgment upon yourself
2. Instruct an attorney either privately recruited, at a University Law Clinic or at the Legal Aid Board to enter an appearance, plea, and special plea on your behalf;
3. If you don’t want to go this route but are really serious about your matter, then, you can simply instruct an attorney to specifically draw up your pleadings(both plea on merits and special plea of prescription), you then only have to serve it on the plaintiff and clerk of courts;
4. Once you get a ‘notice of set down(date of trial),’even though in the vast majority of cases the plaintiff withdraws immediately upon seeing your pleadings!!!! So you save this way

Quantitative research Extinctive prescription invite:

If you care to take part in a survey, please send a blank email to vanash.naick@gmail.com

[Citizen X]

LegalWise assists you with drafting a letter in which prescription is claimed. So, if you have a LegalWise policy, it will prove to be very beneficial to you with matters regarding prescription
“How can LegalWise assist you?
LegalWise can assist you with the following:
· write a letter to your creditor stating that prescription has lapsed, been delayed or interrupted; and
· calculate your prescription period for you.”[1]

---

[1] LegalWise: http://www.legalwise.co.za/index.php?cID=170. Accessed 20 January 2014

[Fouchee]

Hi guys
new on the forum , so please excuse the repeated question a year after the last post!. I had to close down my business in 2008 and subsequently lost my house/car etc in the process as well. During this time I was banking with ABSA and they collected all outstanding monies from the sale of my house at the time and then they closed all my accounts with them. We have not done any business (me and ABSA) since then. Out of the blue a week ago I got a call from MBD attorneys "acting" on their client"s (ABSA) behalf demanding an outstanding amount of R38k. This is 6 years after I stopped doing business with ABSA and during this period I did not receive ANY correspondence from ABSA.
Do I walk the "prescribed" route with confidence in this case?

[Citizen X]

Hi guys
new on the forum , so please excuse the repeated question a year after the last post!. I had to close down my business in 2008 and subsequently lost my house/car etc in the process as well. During this time I was banking with ABSA and they collected all outstanding monies from the sale of my house at the time and then they closed all my accounts with them. We have not done any business (me and ABSA) since then. Out of the blue a week ago I got a call from MBD attorneys "acting" on their client"s (ABSA) behalf demanding an outstanding amount of R38k. This is 6 years after I stopped doing business with ABSA and during this period I did not receive ANY correspondence from ABSA.
Do I walk the "prescribed" route with confidence in this case?

Hi Fouchee,

Based on the information you provide, you may with confidence go the extinctive prescription route. Remember, only judgment debt, aknowledgement of dent or any actual payments made in a three year period from the date of your last payment will destroy your extinctive prescription claim...