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In Debt

We all owe money to one or more creditors.

Sometimes it is a lot of money owed to a bank like for example the bond on our house or the car that we bought for ourselves or the family.

At other times it is a smaller amounts owed on a credit card or on one or more clothing accounts etc.

All debt and the repayment of debt is however important and we should not underestimate the role it plays in all of our lives. As we know; credit providers including banks, financial institutions, clothing shops and other retailers provide information on our debt levels and our record of repaying that debt to the various credit record companies like ITC, Experian etc; and it is these records that give other retailers an indication of your credit health. They do research before they decide whether or not to lend you money or allow you to open another account. Your credit health and record are vitally important to your everyday life and financial well-being. It is to your advantage to look after your credit health.

An aspect of our lives as debtors needs to be looked at however and this has been raised with us several times over the last month or so. That is the systematic bullying of some of us by debt collectors and some attorneys firms that act as collection agents for some of the large financial institutions. This can take various forms: E-mails, telephone calls or smses that state: “a trace alert will be placed on you at all the credit bureaus if you do not settle this debt immediately…” or words to that can also be in the form of a brightly coloured letter in big print making all sorts of threats and warning of dire consequences should you fail to pay etc.

Some of these firms have been reported to the relevant authorities for their threats which amount to harassment and very often contain detail which is factually wrong, inaccurate and sometimes even contain bare faced lies!! Do not be intimidated by them!! You have rights and legal processes have to be followed by creditors and their attorneys in recovering monies due by proper legal due process and in an acceptable legal and ethical manner.

One of the other issues is that these agencies often try to recover debts which have already prescribed in terms of sections 10 and 11 of the Prescription Act and once prescribed are not due and payable and cannot be legally enforced or pursued unless they manage to get you to enter into a new cause of debt; so be careful. If the debt is more than 3 years old and you have not made any payments on it during that period and have also not been served with a summons during the 3 year period the chances are that the debt has prescribed and you can no longer be forced to pay it! In these circumstances be very careful that you do not enter into a new agreement with the creditor, its debt collectors or attorneys to again agree to repay that debt and hence create for them a new cause of action which they can then rely on to recover a debt which has already in law and in terms of the act prescribed; unless, of course, you really feel that you should pay it for moral reasons if not legal ones.

It is important to know your rights and if you are not aware of them to find out what your rights are before you commit to something. Do not forget the old saying; “Ignorance of the law is no excuse.” It is as valid today as it ever was in the past.

We reiterate that if you are wanting to enforce your legal rights and/or when someone demands money from you; it is always wise to first get proper, professional legal advice before you do anything else. You need to know exactly where you stand.

If you have a query regarding debt, how to resolve it or with a prescribed debt; contact for proper, professional legal advice.

Written by: Hugh Pollard (Legal Consultant)

The Legal Advice Office.

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+27 82 093 2304

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Legal Advice Office

South Africa

Kandelaar Street, Vermont, Hermanus
Phone: +27 (028) 316 2832