Factsheet No. 3
Recovery of Debt: What are the time limitations?
If you owe money to any person or company, known as a creditor, they have the right to recover the money from you. However, there are time limitations that apply to how long a debt can be pursued to make sure that the process is fair to you.
How long will the person I owe money to have to chase me for the debt?
A debt can be recovered at any time within six (6) years from when it becomes "due and payable" in full. For some debts the six years starts from the time the debt is incurred and for other debts the six years starts at a later time. Make sure you check with a lawyer before refusing to pay an old debt. This means the person who the money is owed to has six years to start legal action against you. If after six year period has expired, payments are made or the person who owes the debt (debtor) acknowledges that they owe the debt, the six years starts again from the time of the payment or acknowledgement.
How long will the person I owe money to have to enforce a judgment debt against me?
If the debt is a judgment debt, that is, one that a magistrate or a
judge has ordered to be paid, it may be enforced anytime within twelve
(12) years of the date of order is made.
What happens if I have a debt, which is "Out of time" ?
If the debt is more than six years old (or a judgment debt is held from the Court stating you owe the debt is more than 12 years old), the person to whom it is owed might still be able to make you pay it back. In some rare circumstances, they might be able to make an application to the court to have the time extended. However, this is very difficult for them. In most circumstances you will not have to pay back a debt, which is "out of time".
However, if you have confirmed the debt, either by admitting that you owe the money or making a payment, the time limit starts again from the date of the confirmation. So, for example, every time you make a payment on a loan you are starting the six year limitation period again.
If you have a debt, which is "out of time", that is the debt is older than 6 years old (from when you were required to pay it), you should seek legal advice about whether or not you still have to pay the money back.