When does a debt prescribe in South Africa?
Prescription is the rule that a debt can no longer be enforced once enough time has passed. For most unpaid invoices that’s three years, so it’s worth knowing exactly when the clock starts and what stops it.
By Kyle Zorger, founder of ARS Financial · Updated · 5 min read
In short
- Most ordinary debts, including unpaid invoices, prescribe after three years under the Prescription Act 68 of 1969.
- The clock usually starts when the debt is due, not when the invoice was sent.
- If the debtor acknowledges the debt, in writing or by conduct such as a part-payment, the clock starts again from zero.
- Serving a summons on the debtor also interrupts prescription. A letter of demand on its own does not.
- Some debts take longer: six years for bills of exchange and other negotiable instruments, and 30 years for judgment debts and debts secured by a mortgage bond.
What prescription means
Under the Prescription Act 68 of 1969, a debt is extinguished once the prescription period has run. After that, the creditor can’t successfully enforce it in court, provided the debtor raises prescription as a defence. A court won’t apply it on its own, but you shouldn’t rely on a debtor overlooking it.
How long you have
- Three years: most ordinary debts, including unpaid invoices for goods and services.
- Six years: debts arising from a bill of exchange or other negotiable instrument, such as a cheque, or from a notarial contract.
- 15 years: certain debts owed to the State, such as State loans.
- 30 years: judgment debts, debts secured by a mortgage bond, and taxation debts.
When the clock starts
Prescription generally starts to run as soon as the debt is due. For an invoice with 30-day terms, that’s the date payment fell due, not the date you sent the invoice. In the unusual case where you didn’t know about the debt or who owed it, and couldn’t reasonably have found out, the clock only starts once you could have known.
What interrupts or delays it
- Acknowledgement of debt: if the debtor expressly or tacitly acknowledges that they owe you, prescription is interrupted and a fresh period starts. A signed acknowledgement of debt is the clearest form; a part-payment usually counts too.
- Service of a summons: serving legal process that claims payment interrupts prescription.
- Certain impediments delay completion, for example when the debtor is outside South Africa, so the debt can’t prescribe until a year after the impediment ends.
A letter of demand, reminders and phone calls don’t interrupt prescription on their own, however firm they are.
What this means for your unpaid invoices
- Treat three years from the due date as a hard deadline, and act long before it.
- When a debtor agrees to pay in instalments, get it in writing as a signed acknowledgement of debt.
- Keep good records: invoices, delivery proof, emails and any part-payments.
- If a debt is getting close to three years old, speak to an attorney about issuing summons in time.
For consumer credit agreements, the National Credit Act adds further rules about collecting prescribed debts. This guide is general information about business debts, not legal advice.
Frequently asked questions
For most ordinary debts, including unpaid invoices, three years from when the debt fell due. Some debts take longer: six years for bills of exchange and other negotiable instruments, and 30 years for judgment debts and debts secured by a mortgage bond.
No. A letter of demand on its own doesn’t interrupt prescription. The debtor acknowledging the debt, or a summons being served on them, does.
Usually, yes. A payment towards the debt is generally treated as a tacit acknowledgement of it, which interrupts prescription so a fresh three-year period starts.
A prescribed debt can’t be enforced through the courts if the debtor raises prescription. For consumer credit agreements, the National Credit Act also restricts collecting prescribed debts.
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