Breather for Creditors; Beware for Debtors
Commercial debtors and creditors (veteran and inexperienced) are generally aware of the Golden Rule when it comes to debt collection. It is a very old yet deadly rule; it would appear, however, that creditors and debtors alike appear to have limited understanding of this rule in the practical sphere. The Golden Rule : As a general rule, Section 11(d) of the Prescription Act, 68 of 1969 declares that if a debt is owed by person A ( the debtor ) to person B ( the creditor ), and unless person A is a State entity, person B is granted a period of three years from due date to claim the debt from person A in a Court of competent jurisdiction before the debt shall be deemed to have become legally extinguished. It is essential that creditors and debtors alike are aware of this Rule. For the creditor, it indicates the time allowed to enforce its rights to claim the said amount from the debtor. For the Debtor, it indicates whether or not there is a valid defence against a debt wh