The Prescription Act, No. 68 of 1969 deals with the prescription of debt. Prescription is a legal principle in terms of which a debtor’s liability to pay an outstanding debt is extinguished after the passing of prescribed time periods. The above will apply, provided that the debtor has not during such prescribed period, in any way acknowledged his/her liability to pay such debt. If the creditor served a summons during the prescribed period or where the debtor acknowledges liability, the prescription period will be interrupted and will start to run afresh from the date on which the summons was so served or the liability acknowledged. Prescribed debts are generally contractual and civil debts that should be extinguished or written off after a period – typically three years – from the date when the payment was due’ What are the limitations of Prescription Act 68 of 1969? In terms of the Prescription Act 68 of 1969 ("the Act"), "debts" prescribe after a period of 3 years. In order to avoid losing the legal right to enforce a claim (payment of a "debt"), a creditor must interrupt prescription by instituting proceedings against a debtor before the end of the 3 year period.
How does this affect Mafube residents, business owners and ratepayers?
Simply stated, where Mafube Local Municipality (MLM) failed to send out statements for a number of years, and residents, business owners and ratepayers could as a consequence not make payments in terms of municipal charges, the outstanding debt older than 3 years have prescribed and may be written off. Bearing in mind that this does not apply to rates & taxes, there are four factors/questions to consider when determining if a debt has prescribed.
1. What type of debt it is? 2. How long is the applicable prescription period? 3. When did prescription begin to run? 4. Was prescription delayed or interrupted?
Mafube Business Forum (MBF) will assist the community with regards to the above and invite residents, business owners and ratepayers to visit our offices at 18A Kerk Street, Frankfort on Mondays to Thursdays from 08h30 to 16h00 and Fridays 08h30 to 12h00. Call or send a WhatsApp message to Marina at 079 145 4295. Visit our website www.mafubebf.org and follow us on Facebook.
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