My mother was a member of a CC approximately 14 years ago. The business went sour and she had signed surety for the company overdraft. The bank in question issued summons for the amount due back when the company was closed. She has been recently contacted after approximately 10 years with regards to settlement of the outstanding (+14 years worth of interest) by an attorney affiliated with the bank. She has received no statements, no phone calls, no legal proceedings no nothing in the last 10 years.
My question is that, would the summons have prescribed? And then thus the debt? Does this sound like debt sold to collection agencies as the bank would have surely written off these amounts by now?
Thank you for the question. This debt would most definitely have prescribed if there was no attempt by the creditor to collect or make contact. Debt usually prescribes in 3 years. in order for debt to prescribe there must have been no action taken from the creditor’s side to collect the funds, no summons must have been issued during that period and the debtor (which is you mom) must not have acknowledged the debt in any way.
All your mother has to do is to raise the defence of prescription. Whatever they tell her, whatever they write to her, she must simply say that the debt has prescribed and then not talk to them any further. If summons has been issued now, the prescription defence must also be raised, but in court. I would strongly suggest that you speak to an attorney to represent your mother during the court case. If summons has been issued she will have to go to the court. Do not wait another day. Speak to an attorney today if you can in order for him to prepare a defence.
In the meantime you mother must not talk to the creditor and she must especially not make any payment, even if it is 50c. Any action she takes that can constitute an acknowledgement of the debt will interrupt the prescription and the 3 years would start all over again. this usually happens when debt is bought by a 3rd party. They attempt to interrupt the prescription.
With the new Credit Amendment Act which should come into effect early next year creditors will be prohibited from selling prescribed accounts and also be prohibited from collecting on prescribed accounts.
Please do not hesitate should you require more info.