Understanding Prescription: When Does a Debt Become Too Old to Claim?

Have you ever been told that a debt is too old to collect, or that it has simply 'fallen away'? This concept is known in law as prescription — a legal time limit on how long a creditor has to claim payment.

To better understand prescription, consider the following examples:

Example 1: A simple personal loan

Assume you lend a friend R10,000.00 and agree that they must repay you by 1 June 2026. If they do not pay on that date, the debt is immediately due.

Prescription would generally start running from 1 June 2026 because that is the date on which you could first demand payment and, if necessary, sue for the debt.

Example 2: Monthly instalments

Assume someone buys a couch and agrees to pay R1,000.00 per month for 12 months. Each monthly instalment becomes due on its own payment date.

If the debtor misses the January instalment, prescription may begin running in respect of that January instalment, even though the later instalments are not yet due.

Example 3: A loan with an acceleration clause

Assume a person borrows R100,000.00 and agrees to repay it over 24 months. The agreement says that, if the borrower misses an instalment, the creditor may demand the full outstanding balance immediately.

This is known as an acceleration clause. It allows the creditor, in certain circumstances, to bring forward the due date of the entire outstanding balance.

However, the wording of the clause is important. Some acceleration clauses operate automatically. Others require the creditor to first make an election, send a notice, cancel the agreement, or demand the full balance. This distinction can be decisive when determining when prescription starts running.

What is prescription, legally?

Regulated by the Prescription Act 68 of 1969, the general rule of prescription is that it begins to run as soon as a debt becomes “due”. A debt is usually due when the creditor is legally entitled to claim payment and the debtor is under an immediate obligation to pay.

For many ordinary contractual debts, such as unpaid invoices, personal loans, rental arrears, or money owed under a standard agreement, the prescription period is generally three years from the date on which the debt becomes due.

However, the Prescription Act provides for longer prescription periods in certain circumstances. For example:

Time period before claim expires	Description of claim
30 years	Judgement debts Debts secured by a mortgage bond
15 years	Debts owed to the State particularly those arising from loans, advances, or the sale or lease of land by the State.
6 years	Debts arising from certain negotiable instruments, such as bills of exchange or other similar instruments.

Accordingly, while the three-year period is often the starting point in many commercial and personal debt matters, it is not the rule for every debt. The nature of the debt, the underlying agreement, whether judgment has been granted, and whether security such as a mortgage bond exists can all affect the applicable prescription period.

The key question is therefore not only how much time has passed, but also when the debt legally became due.

What interrupts prescription?

Prescription does not always run uninterrupted. In certain circumstances, the running of prescription can be interrupted.

In simple terms, interruption of prescription means that the legal “clock” either stops or starts afresh. This can be extremely important because it may prevent a claim from prescribing.

Two common examples are:

1. Acknowledgment of liability

Prescription may be interrupted where the debtor expressly or tacitly acknowledges liability. For example, if a debtor writes to the creditor and says, “I know I owe you the money, please give me more time to pay”, that may constitute an acknowledgment of liability.

A partial payment may also, depending on the facts, amount to a tacit acknowledgment of liability. For instance, if a debtor pays R2,000.00 towards a debt of R10,000.00, that payment may indicate that the debtor accepts that the debt exists.

Where prescription is interrupted by acknowledgment of liability, prescription generally starts running afresh from the date of that acknowledgment.

2. Service of legal process

Prescription may also be interrupted by the service of legal process, such as a summons, provided the creditor proceeds with the claim as required by law. For example, if a creditor issues and serves summons before the claim prescribes, that service may interrupt prescription. The creditor cannot simply sit back after service, but proper legal proceedings can protect the claim from being defeated by the passage of time.

Conclusion

Prescription is not simply a matter of counting three years from the date of default. The correct question is: when did the debt become legally due and enforceable?

If you are unsure whether a debt has prescribed, whether prescription has been interrupted, or whether your agreement contains an enforceable acceleration clause, it is advisable to obtain legal advice before taking, or delaying, further action. 

Ezekiel Dikio

LLB

Associate at Le Roux Vivier Attorneys

Disclaimer: The views expressed in this article are those of the author(s) and do not necessarily reflect the views of the firm. This content is provided for general information only and does not constitute legal advice. While every effort is made to ensure accuracy, the law may change and its application depends on the specific facts of each matter. Readers should seek professional legal advice before acting on any information contained herein. The firm and the author(s) accept no liability for any loss or damage arising from reliance on this content.