Have you ever received a letter of demand for debt that you cannot even remember? Many years after you are said to have taken out this debt? Maybe you had taken out the debt but you believed it was paid off or you may have lost your job and informed your creditor of this fact and they wrote the debt off as bad debt. Suddenly, out of the blue, you get a letter of demand for it.

Debt prescribes if:

• You have not acknowledged the debt in the past 3 years either verbally or by signing a form
• You have not made any payment towards settling it
• You have not received a summons for it

If the demand relates to a debt that meets the above 3 conditions then it has prescribed and you are not legally bound to pay for it. So you can refuse to pay for it on the grounds that it has prescribed.

Also take note that it is upon the company that claims you owe it to prove that the debt has not prescribed and that you are still bound legally to pay for it.

But why do companies or debt collectors attempt to get a debtor to pay a debt which has prescribed? Legally, there is nothing wrong in a company or debt collector trying to get you to pay for old debt that has prescribed. It is up to you to know your rights!

If you ever receive a letter of demand for a debt that has prescribed, write back and inform the company that you believe the debt has prescribed. At this point, you are likely to be told that only a magistrate can decide whether a debt has prescribed or not. If this happens, give them your current address so that they can summon you to court. Chances are that this will never happen.

If you decide to pay the debt, you have a right to ask for a full statement with details of how the total amount is made up. Look out for excessive debt collection fees that may have been charged. If you believe you are being ripped off, you can report the debt collector to Council for debt collectors on www.debtcolcouncil.co.za

Please send this to the people you care about, especially HR practitioners, I just did.