Debt: Legally cancelling a debt over 3 years old

[Shari]

Hi!

I have a strange case. I took a loan in 2009, and years later put myself under debt review. Many of these accounts landed up by debt collectors and in the case where I had paid up letters, I could submit these, with the others I told them it had been paid under debt review, and when they still nagged, I used the prescription rule. Now I have Nedbank about a personal loan, with the lady stating that I have a judgement on my name and that the prescription doesn't work as they have judgement. At no time was I served with a summons, and there was nothing on my name, as I just had old stuff cleared. I asked for the proof, and she has sent me a copy of a summons issued to me in 2011. What does this mean if the court had issued summons then, but obviously I had not received it and there is no proof of judgement, can they still collect on this debt?

[Citizen X]

Sale of prescribed debt prohibited; collection of prescribed debt prohibited

The National Credit Amendment Bill 19 of 2014 has been signed into law.
Seeing that I don’t ‘google’ my Legislation or Bill[I obtain them from official sites/sources], I’m confident that the following is highly accurate:

126B.Application of prescription on debt
(1)
(a) No person may sell a debt under a credit agreement to which this Act applies and that has been extinguished by prescription under the Prescription Act, 1969 (Act No. 68 of 1969).
(b) No person may continue the collection of, or re-activate a debt under a credit agreement to which this Act applies-
(i) which debt has been extinguished by prescription under the Prescription Act, 1969 (Act No. 68 of 1969); and
(ii) where the consumer raises the defence of prescription, or would reasonably have raised the defence of prescription had the consumer been aware of such a defence, in response to a demand, whether as part of legal proceedings or otherwise.

[Proposed amendment: S. 126B to be inserted by s. 31 of Act 19/2014 w.e.f. a date to be proclaimed]

It’s this last part of section 126B that I need to look into:
[Proposed amendment: S. 126B to be inserted by s. 31 of Act 19/2014 w.e.f. a date to be proclaimed]

It's the 'with effect from a date to be proclaimed,' that I'm looking into. Has section 126B taken effect? If so when? If not when?

[Citizen X]

I would like to take this opportunity to commend the Nimble Group, a debt collecting group, among other services rendered, for their stance that they have officially taken on prescribed debts.



I obtained the following from their website:



http://www.nimblegroup.co.za/news/prescription-and-the-changes-in-the-national-credit-amendments-act/




“Prescription relates to the extinguishing of an obligation (a debt) due to the passing of time.

To most South Africans, prescription refers to some medical document your doctor uses to authorise the dispensing of medicine by a pharmacy or clinic. Few South Africans are aware of the Prescription Act 68 of 1969 which relates to the extinguishment of a debt after a prescribed period of time. There are various rules which dictate the time period over which a debt may be considered extinguished or prescribed. There are also various actions which may interrupt or delay the period of prescription and cause a new period to start running afresh. Once one is aware of “prescription”, it is easy to find numerous articles and documents summarising, explaining and providing examples of the prescription of a debt.

The onus is on the consumer to “claim the defence of prescription”. Therefore, credit providers are legally entitled to collect a debt, even after the debt owing has technically prescribed (i.e. become extinguished), provided that the debtor has not raised the defence of prescription.

In May 2014, the President signed into law the National Credit Amendments Act (“NCAB”). S126B of the NCAB specifically relates to debt which has prescribed in terms of the Prescription Act. S126B requires the credit provider to cease collecting on prescribed (extinguished) accounts where the debtor raised prescription as a defence or where the debtor would have raised prescription as a defence had he/she been aware of this defence.

Nimble Group believes that we have the responsibility to educate our debtors on prescription and creating an awareness of this defence to assist our debtors in protecting and exercising their rights. Our website provides visitors with full access to the Prescription Act 68 of 1969, the National Credit Act and specifically S126B of the National Credit Amendments Act (refer to our Resources page). We have sent our debtors SMS’s requesting that they visit our website to gain an understanding of S126B, prescription and the effects this amendment may have on their accounts. Should a debtor consider that his/her account may be prescribed, we have provided an easy to complete “prescription claim form” on our Accounts Enquiry page where debtors can submit their claim. These claims will be assessed and feedback provided to the debtors.

It is our goal to continue to ensure that our debtors are made aware of the defence of prescription. We encourage our debtors to acquaint themselves with their rights in respect of the Prescription Act and the National Credit Act, seek advice from debt counsellors, legal or financial experts and fully understand the nature of prescription and the effect this may have on their accounts.”[1]



Well done NimbleGroup!

This is ethical practice! This is in keeping with the term profession which in latin is professio and means to make a public promise or statement

---

[1] Nimble Group “prescription news” http://www.nimblegroup.co.za/news/pr...mendments-act/ date of use 11 November 2014

[Citizen X]

I’m not one to bask in my own glory and I’m not doing so right now!
[“I don’t need to have NO ambition, you know, I only have one thing that I’d really like to see happen, I’d like to see mankind live together Black, White, Chinese and anyone!”]



I’m merely reflecting with the benefit of hindsight. When I posted my first thread on extinctive prescription I was acutely aware that prescription strictly and only could be raised as a defence in court by way of a special plea.



I coined the phrase ‘extinctive prescription claim'(I need to qualify this before my detractors take a bite at me.)When I say I coined the phrase I mean claiming prescription directly from the creditor and/or their attorney as opposed to raising it as a special plea in court,’

I went through a process of literally arguing this concept with many CEO’s of banks and other financial institutions(have tons of emails to prove this). My premise was simply that if you demanding payment and if one has a comprehensive answer such as ‘the debt is prescribed and even if you do sue out summons, your action will dismally fail and you will be wasting the court’s time.’ It was the idea of completely resolving a matter before it even reaches the judicial process.

If one looks at the internet record, there were very few articles or writing on extinctive prescription and its benefits to debtors before 2011. In stark contrast the internet is literally saturated with articles on extinctive prescription today.
The power of TFSA created great awareness about extinctive prescription.
Shortly after 2011, I made written submissions to the South African Law Reform Commission about the amendment of the Prescription Act in favour of debtors, for the recognition of an ‘extinctive prescription claim,’ that day has arrived. I just didn’t apply my mind properly to which Act should be amended. As it were the NCA was amended

This work will address the practical position of extinctive prescription claims in South Africa today. It will address the ease alternatively the difficult of claiming extinctive prescription in terms of section 11(d) of the Prescription Act 68 of 1969. It will reveal shortcomings in industry and the Prescription Act itself and perhaps more importantly it will make recommendations for the amendment of the 1969 Act. This work in and of itself is an impassioned plea to the South African Law reform commission to initiate the amendment of the 1969 Act. The purpose of such recommended amendments is to make the Act more meaningful and applicable to a debtor who is eligible for an extinctive prescription claim and simply wants to claim extinctive prescription.



26 September 2012 http://www.theforumsa.co.za/forums/s...ial-plea/page2 #12

1. Many financial institutions and major retailers don’t have rules, regulations, policy and procedure in place to process extinctive prescription claims;
2. Many financial institutions and major retailers cannot appreciate the difference between an extinctive prescription claim and a special plea of prescription;
3. Many debt collectors and attorneys acting on instruction of financial institutions and major retailers intentionally preclude a debtor from claiming extinctive prescription and engage in unethical conduct to get a debtor to unwittingly make a payment on a debt that would otherwise be eligible for an extinctive prescription claim. The debtor then unwittingly acts to his/her own prejudice by causing the prescription period to run afresh
4. Many debt collectors and attorneys acting on instruction of financial institutions and major retailers intentionally preclude a debtor from claiming extinctive prescription and engage in unethical conduct to get a debtor to unwittingly acknowledge debt that would otherwise be eligible for an extinctive prescription claim. The debtor then unwittingly acts to his/her own prejudice by causing the prescription period to run afresh
26 September 2012 http://www.theforumsa.co.za/forums/s...ial-plea/page2 #12

I feel vindicated that section 126B has been inserted to the NCA by way of amendment:


Sale of prescribed debt prohibited; collection of prescribed debt prohibited



The National Credit Amendment Bill 19 of 2014 has been signed into law.
Seeing that I don’t ‘google’ my Legislation or Bill[I obtain them from official sites], I’m confident that the following is highly accurate:

126B.Application of prescription on debt
(1)
(a) No person may sell a debt under a credit agreement to which this Act applies and that has been extinguished by prescription under the Prescription Act, 1969 (Act No. 68 of 1969).
(b) No person may continue the collection of, or re-activate a debt under a credit agreement to which this Act applies-
(i) which debt has been extinguished by prescription under the Prescription Act, 1969 (Act No. 68 of 1969); and
(ii) where the consumer raises the defence of prescription, or would reasonably have raised the defence of prescription had the consumer been aware of such a defence, in response to a demand, whether as part of legal proceedings or otherwise.
[Proposed amendment: S. 126B to be inserted by s. 31 of Act 19/2014 w.e.f. a date to be proclaimed]

It’s this last part of section 126B that I need to look into:

[Proposed amendment: S. 126B to be inserted by s. 31 of Act 19/2014 w.e.f. a date to be proclaimed]

It's the 'with effect from a date to be proclaimed,' that I'm looking into. Has section 126B taken effect? If so when? If not when?

The credit goes to TFSA(and rightfully so), without which none of this would have even had been possible.

I therefore owe a debt of gratitude to Dave for giving autonomy with this thread.

[Dave A]

Credit belongs to the origin of the thoughts posted here, so well done Vanash

[Citizen X]

Credit belongs to the origin of the thoughts posted here, so well done Vanash

Many thanks indeed Boss I need a drink after this The original idea of prescription in general originated in ancient Rome.

As previously mentioned credit goes to TFSA. None of this would have been possible without the power of the forum...

"You can copy it but there's no copy to it."

[KCS]

I have read most of the posts on this discussion, and find it excellent, interesting and informing.

There is just one thing that bothers me a little. Why would one want to find a way to legally cancel debt? In my world, if you owe money, you make a plan to pay it. End of story.

Just saying...

Cheers

KC

[Citizen X]

I have read most of the posts on this discussion, and find it excellent, interesting and informing.

There is just one thing that bothers me a little. Why would one want to find a way to legally cancel debt? In my world, if you owe money, you make a plan to pay it. End of story.

Just saying...

Cheers

KC

I’ve answered this very question several times!



Extinctive prescription is not there to allow debtors to get away with debt but rather to punish a creditor for not suing out summons on time!
Hope this answer clarifies things

[Citizen X]

Section 126(B) of the National Credit Act is in effect, it applies retrospectively from 13 March 2015

[S. 126B inserted by s. 31 of Act 19/2014 w.e.f. 13 March 2015]