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  • Writer's picturezarreen soni

Recognizing the effects of prescribed debt and its alternatives:

Don't just pay it immediately!

Discover the consequences of prescribed debt...

South Africans have been given long-term credit obligations, and many of them struggle to make payments. During a particular time period, credit issuers make an effort to collect any unpaid debt. However, they ultimately decide to sell the debt or offer it to businesses who will collect bills on their behalf. These companies actively pursue client payments, regardless of how long the debt has been unpaid.

The customer is usually not even aware of the debts that they are pursuing. This debt might go back further than three years. Furthermore, there could not be any records or other proof that the client ever acknowledged the debt.

The National Credit Act amendments passed in March 2015 created a clear decree on Prescribed Debt in South Africa, which has changed how these debt collection companies are allowed to function.

Consumers are unfortunately still uninformed of the National Credit Act's restrictions on prescription debt, leaving them vulnerable to abuse from debt collection companies. Let's look at a few consequences of prescription debt.

Impacts credit rating

One of the most serious implications of prescribed debt is the potential harm it may do to your credit score. Even though the debt is no longer legally enforceable, it might still be reported to the credit bureaus and have a negative impact on your credit score. In the future, getting approved for loans, credit cards, or even rental applications could be difficult.

Legal action

Mandatory debt also has the potential for judicial action. The creditor or debt collector may still bring a lawsuit to recoup the debt even if it is prescribed. Personal property seizures, bank account levies, and even wage garnishment may be involved in this.

Debt collectors

Mandatory debt may also lead to ongoing harassment from debt collectors. Even if the debt may be prescribed, the creditor or debt collector may still contact you in an effort to collect it. The process may be intimidating and frustrating.

Prescribed Debt Non-Payment Alternatives

Even while being excused from the obligation to repay prescribed debt may seem relieving, there are other options to consider before deciding not to pay. the resolution of a debt with a collector

One choice is to bargain a settlement with the creditor or debt collector. A percentage of the debt may need to be paid in order for the creditor to agree to stop legal action and report the debt as resolved to the credit bureaus.

Contact Clear Review Consultants for a tailor-made financial solution plan on 0215696041 or visit our website to fill out a form:

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