- Most consumer debts expire after three years, but payments, acknowledgements of responsibility, and legal actions can restart the expiration period.
- A debt marked as written off does not automatically cancel, and creditors may still collect or sell it to third parties.
- Consumers have the right to dispute illegal listings on credit reports, including those for expired debts.
Many South Africans think that if they ignore a debt for three years, it simply disappears.
According to Ann-Suhet Marx, Director of Litigation and Fiduciary Services at Van Deventer Dowlath & Marx Incorporated, that belief is one of the most common and costly misunderstandings about debt in South Africa.
Marx explains that while South African law allows certain debts to expire after a set period, this expiration is not automatic in every case and can be interrupted in ways many consumers do not understand. She also points out confusion around debts marked as written off on credit reports, leading many people to mistakenly believe that a write-off means they do not owe the money anymore.
“The gap between what consumers believe and what the law actually says is where collectors and creditors gain the advantage,” Marx says.
How expiration works
Expiration is governed by the Prescription Act 68 of 1969. Marx explains that most ordinary consumer debts expire three years from the date the debt became due.
These debts include personal loans, credit cards, retail store accounts, utility bills, and many other usual service-related debts. Once a debt fully expires, it cannot be enforced in court.
Marx notes that consumers often think all debts fall under the same three-year expiration period, but the law provides different periods for various types of debt.
Bills of exchange and certain notarial contracts generally expire after six years. Debts owed to the state expire after 15 years. Mortgage bonds, court judgments, and certain secured debts have expiration periods of 30 years.
This distinction is important when a creditor has already obtained a court judgment. “This is why it matters greatly whether a creditor has stopped pursuing you or has already gone to court and obtained an order,” Marx explains.
She clarifies that expiration begins from the date the debt became due, which is usually when the creditor first had the right to demand payment. In many credit agreements, this date is often when the consumer first missed a payment.
What stops expiration from running
One big misunderstanding about expiration is the belief that time keeps running until the debt expires. Marx states that the Prescription Act outlines specific circumstances that interrupt expiration and restart the clock.
The first is the service of legal process. If a creditor issues and serves a summons and takes the case to judgment, expiration is interrupted from the date of service.
Marx warns that consumers should not assume that expiration continues just because they did not personally receive court papers. “A summons served at your last known address is legally valid, even if you never personally received it,” she says.
If a creditor serves a summons but then abandons the case without obtaining a judgment, the interruption may lapse, and expiration can be treated as if it had never stopped.
The second major interruption happens when a debtor acknowledges liability. According to Marx, this can happen through a formal acknowledgement of debt, a written statement that money is owed, or even a partial payment on an outstanding account.
A consumer who makes a small payment on an old debt may unknowingly restart the entire expiration period. Similarly, an email or message that accepts responsibility for the debt may have the same effect.
“Any acknowledgement, even an informal one, resets the expiration period completely,” Marx warns. She suggests that consumers be cautious when discussing very old debts with debt collectors and seek legal advice before making payments or admissions that could affect expiration.
Why do old debts suddenly resurface
Many consumers are surprised when creditors pursue debts just before they are set to expire. Marx explains that this often happens because of account management systems used by banks, credit providers, and debt collection firms.
These systems keep track of the age of debts and can alert creditors when an account is nearing the end of its expiration period. Legal action may then be taken right before the expiration would take effect.
“A creditor who has been inactive for two years and eleven months may suddenly issue a summons in the final weeks before the debt expires, specifically to restart the clock and reset the three years,” Marx explains.
She advises consumers to never ignore a summons, letter of demand, or any communication about an old debt. They should also avoid acknowledging liability before seeking advice on whether the debt may have already expired.
Raising expiration as a defence
Marx emphasises that expiration does not automatically protect against legal action. In many cases, a debtor must raise expiration as a defence if a creditor takes court action.
If a creditor tries to collect a debt that has expired, the debtor can raise the expiration defence in response to the claim. If this defence is successful, the court action should fail.
For debts regulated by the National Credit Act, consumers have extra protection. Section 126B of the Act prevents credit providers from collecting expired debts, selling expired debts for collection, or trying to revive debts that have legally expired.
“The practical advice is this: If you believe a debt has expired and a creditor is trying to collect it, do not just pay. Get legal advice first,” Marx recommends.
What is written off really means
Another confusing area is the term “written off” on a credit report.
Marx explains that a write-off is mainly an accounting decision made by a creditor. It indicates the creditor thinks recovering the debt is unlikely and that the debt should no longer be listed as active.
However, this decision does not automatically cancel the debt or release the consumer from responsibility.
“When a creditor writes off your account, it does not mean the debt has been waived, forgiven, or cancelled,” Marx states.
The creditor may still try to recover the debt, sell it to a debt purchaser, or take legal action if the debt is still enforceable. The write-off changes the creditor’s accounting records, but does not affect the underlying legal obligation.
Rules for negative credit listings
Marx states that creditors must meet strict legal requirements before placing negative information on a consumer’s credit profile.
Before a negative listing can be recorded, consumers must be notified that continued non-payment could lead to a negative credit report. Consumers must also have been in arrears for a specific time before negative information can be listed.
These rules aim to ensure fairness and give consumers a chance to resolve outstanding accounts before facing the consequences of a negative credit record.
Marx notes that different types of information remain on credit reports for different periods. Negative listings like “written off” or “handed over” usually stay for one year or until the debt is settled. Court judgments can remain for five years or until resolved. Debt review and administration order information can stay until revoked or for up to ten years, while payment profile information is generally kept for five years.
She adds that expired debt cannot legally be listed or kept on a consumer’s credit record.
Challenging incorrect credit bureau information
Consumers who think inaccurate or illegal information is on their credit report have the right to dispute it.
Marx suggests starting by getting a copy of the credit report and reviewing all entries. South Africans have the right to access their credit information for free from registered credit bureaus.
After identifying a problem entry, the consumer should determine the basis for the dispute. This could involve expiration, incorrect amounts, failure to follow required procedures, outdated information, or illegal data retention.
A written dispute should then be sent to the relevant credit bureau along with supporting documents. If expiration is mentioned, consumers should clearly state that they do not acknowledge liability for the debt.
“The credit bureau has 20 business days to investigate. If it cannot prove that the listing is legal, it must remove it,” Marx explains.
If the issue is not resolved, consumers can take their complaints to the National Credit Regulator or the Credit Ombud. Court proceedings are also an option as a last resort.
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