Question:
My husband opened a CC about 10 years ago. He did very well and had to employ someone to help him. This person was unfortunately a conman and cleaned the business out. We were still, however, liable for the debt.

The business was closed down and my husband ended up without work for about two years. Because we are married out of community of property, he alone was liable for the outstanding debt and because he was unemployed, most of the debt was either written off or paid by me. Even Sars was amazing by writing some debt off.

We suddenly received a letter from a lawyer’s company (who represent Nedbank) about a month ago, telling us that we still owe them money and that it has nearly doubled in the 10 years that it has been outstanding.

My husband is a teacher at the moment (and I am sure you know how much they earn) and cannot really afford to pay this back. My question: Can a company still ask for moneys outstanding after about 10 years (even if we have not heard from them in years) or should they write this off as bad debt?

Answer:
Generally, if a creditor does not start civil proceedings in a court to recover a debt within three years from the last transaction, you have a complete defence against any claim.

The courts will not enforce the debt. This is because the claim may well have prescribed (meaning the claim has lapsed in terms of the Prescription Act (No 68 of 1969).

Beware, though! If you acknowledge your indebtedness, either by making payment of an old debt or otherwise agreeing that you owe the money, you may start the three-year clock running again from scratch.

If someone demands payment of a debt going back several years:

  • Demand to see either proof of judgment or evidence that an acknowledgement of debt has been made in the last three years; and

  • Make sure you get legal advice before you make any payment at all or otherwise acknowledge the debt.
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