Prescribed debt dispute letter (template)

Use this template carefully. Do not change it into an admission that you owe the money. Replace each [PLACEHOLDER].

[YOUR FULL NAME]
[YOUR ADDRESS]
[YOUR EMAIL]  |  [YOUR PHONE]

[DATE]

[CREDITOR OR DEBT COLLECTOR NAME]
[THEIR EMAIL OR ADDRESS]

RE: Reference [REFERENCE THEY USED] - dispute: this debt has prescribed

Dear Sir / Madam,

I refer to your demand dated [DATE OF THEIR LETTER / CALL] regarding an alleged
debt of R[AMOUNT THEY CLAIM].

I dispute that this debt is enforceable. To the best of my knowledge:
  - I have not made any payment toward this alleged debt since [APPROX DATE,
    MORE THAN 3 YEARS AGO];
  - I have not acknowledged this alleged debt in writing or otherwise during
    that period; and
  - no judgment has been granted against me in respect of it.

Under the Prescription Act, this debt has therefore prescribed and is
unenforceable. I do not acknowledge liability for it, and nothing in this letter
should be read as an acknowledgement of the debt or a willingness to pay it.

I accordingly request that you:
  1. cease all collection activity and contact regarding this matter;
  2. confirm in writing that you will not pursue this prescribed debt; and
  3. remove or correct any adverse listing relating to it at the credit bureaus.

If you believe the debt has not prescribed, please provide written proof of the
last date of payment or acknowledgement and of any judgment, so the position can
be assessed.

Yours faithfully,

[YOUR FULL NAME]

Under the Prescription Act, most ordinary unsecured debts - things like personal loans, store accounts, credit cards and overdrafts - prescribe three years after they became due, provided three conditions all hold. You must not have paid anything toward the debt in those three years, you must not have acknowledged it (in writing, by promising to pay, or by part-payment), and the creditor must not have obtained judgment against you.

Some debts take longer to prescribe. Debts secured by a mortgage bond, debts owed to the state in some cases, and judgment debts prescribe after thirty years, not three. So a home loan or a debt where the creditor already got a court judgment does not simply disappear after three years. When in doubt about which rule applies, get advice before relying on prescription.

The single most damaging thing you can do is to acknowledge a possibly-prescribed debt. Acknowledgement includes making any payment, agreeing a payment plan, signing an acknowledgement of debt, or even saying "I will sort it out" in writing. Any of these resets the three-year period and brings the debt back to life.

Collectors know this, which is why they may push for a small "good faith" payment or a quick verbal arrangement. Decline politely, deal with them only in writing, and use the dispute letter above. The whole strategy depends on you raising prescription without ever admitting you owe the money.

• Paying anything. Even R50 "to make them stop" can revive the entire debt for another three years.
• Acknowledging the debt by phone. Collectors record calls. Keep everything in writing.
• Assuming every old debt has prescribed. A debt with a judgment, or a bond, has not. Check the type of debt and whether anything interrupted prescription.
• Doing nothing. Prescription is a defence you must raise. If you ignore a summons, a creditor can still get judgment, and a judgment debt does not prescribe for thirty years.

If a collector keeps demanding payment on a debt you have properly disputed as prescribed, you can complain to the National Financial Ombud, which handles credit-provider conduct since absorbing the Credit Ombud in 2024. If they list it on your credit profile, send a credit bureau dispute letter with a copy of your prescription dispute.

If you receive a summons, do not ignore it. Prescription must be raised as a defence in the legal process, so respond within the time stated, ideally with an attorney, and plead prescription. A debt that you allow to go to default judgment becomes a judgment debt, which prescribes only after thirty years - the opposite of the outcome you want.