AM I LIABLE FOR OLD DEBT

<p> BEING HOUNDED ILLIGALLY</p> <p>Am I still liable for old debt? <br />A Fin24 user wants to know if she is still liable for her debt five years after she stopped making payments. She writes:</p> <p>I opened a retail account as a student in 1999 and failed to pay it up.</p> <p>Recently the creditor has been calling and sending me SMSs to pay the account.</p> <p>Does one still need to pay an account after five years of not paying it?</p> <p>Does it matter if you have not made any arrangements to pay in all that time?</p> <p>Friedl Kreuser of Summit Financial Partnersresponds:</p> <p>The Fin24 user is absolutely correct. Once a debt has "prescribed", it must be written off and you are no longer liable to pay it.</p> <p>Unfortunately, many debt collectors will still try to collect on such debt, often knowing that it has prescribed, but hoping that the consumer will not notice.</p> <p>Certain collectors go so far as to "buy" prescribed debts from credit providers in hopes of collecting payment from unsuspecting consumers.</p> <p>Once the consumer starts paying the debt again, prescription falls away and the debt is once again activated.</p> <p>Every consumer should know when their debt has prescribed. A debt prescribes when:</p> <p>1. A credit provider has not claimed payment/sent a letter of demand/issued summons; and</p> <p>2. A consumer has not made any payments/acknowledged the debt directly or indirectly for the time periods specified below:<br />- Personal loans, credit cards, retail accounts and vehicle loans: three years<br />- Mortgage loans, debts by court orders and money owed to the SA Revenue Service: 30 years</p> <p>If a credit provider or debt collector is demanding payment for a prescribed debt, challenge them and report them to the Council for Debt Collectors on the following numbers:</p> <p>(012) ********** <br />(012) ********** <br />(012) ********** </p> <p>Fax number: <br />(012) ********** </p>