Two Standard Bank clients last week succeeded in appealing the banks attempt to recover a home loan by arguing prescription that the debt had lapsed because of the passage of time.
The Prescription Act sets term limits on various types of debt, after which they are unrecoverable. The term is three years for most kinds of debt (such as credit cards, overdrafts, and instalment sales) and 30 years for mortgage debt.
In other words, if you default on a debt and three years pass, that debt is prescribed, provided you do not acknowledge the debt within that period. Should you admit the debt or the bank issues summons against you within the three-year period, the prescription period starts running anew.
For a primer on prescription, read How to avoid repossession, and when to invoke prescription .
Standard Bank case detailsThe Pretoria High Court last week heard an appeal by Aubrey Schneider and Stephen Zagey.
