It is possible that the debt may be sold to a collection agency, resulting in wage seizures or other financial difficulties. If you have a budget that shows you can’t make payments on your debts, it’s important to notify your creditors. This is also the case if the lender has issued loans even though you did not understand the costs and obligations of the contract, or if the loan agreement results in over-indebtedness.
Can debts be written off in South Africa?
In no way did the credit amnesty write off people’s debts, but only removed outdated information from the credit files of people who paid their debts. If an account becomes due and the debtor fails to pay, you have 3 years to file a lawsuit in the form of a subpoena. If you did not pursue this matter, however, this will be required if a lawsuit has been brought, does not prescribe the claim, or does not expire. You must hire a lawyer to write a letter on your behalf to the respective lenders informing them that the debt is mandatory.
How long does it take for unpaid debts to be written off by South Africa?
Prescribed debts refer to debts that have not been recognized by the creditor for more than 36 months or for which they have been paid. If you’re still unable to repay your debts, you may get an additional twelve months free of repayment. The specific number of years that a negative credit mark is valid on your credit report depends in part on the type of debt in question. By providing for arbitrary debt repayment, the law effectively prevents banks from granting responsible loans, particularly to those in low-income households, who often need them the most.
References:
- https://www.stepchange.org/debt-info/dealing-with-debt-problems/can-i-write-off-debt.aspx
- Writing off bad debt. What does it mean? • Vermeulen Attorneys
Barry Ritholtz is a renowned finance expert, author and blogger. With over 30 years of experience in the financial industry he has gained a reputation as a thought leader and influencer in the investment community.