Acknowledgement of debt template South Africa: how to write one that holds up
6 min read · General information, not legal advice
Quick answer
An acknowledgement of debt (AOD) is a signed admission by the debtor that they owe a specific amount, usually with a payment plan. Under the Prescription Act 68 of 1969, an express acknowledgement interrupts prescription, so the usual 3-year clock starts again from the date of signing.
What to include
1) Full names, ID numbers and addresses of creditor and debtor. 2) The exact amount owed and what it's for (invoice numbers, loan, damage). 3) The instalment amount, dates and where to pay. 4) Interest on arrears, if any. 5) An acceleration clause: miss a payment and the full balance becomes due. 6) A certificate-of-balance clause. 7) Each party's chosen address for legal notices (domicilium). 8) Signatures and the date.
Interest: stay within the law
If no interest rate is agreed, mora interest follows the Prescribed Rate of Interest Act. If the AOD is really a credit agreement between unrelated parties at arm's length, the National Credit Act may apply, which caps interest and fees. Our free late-fee calculator shows the current prescribed rate.
Getting it signed
Offer the debtor something useful in return: time to pay in instalments and a pause on collection steps. Make sure they sign freely; an AOD signed under pressure or threats can be set aside.
When the debtor stops paying
Send a written letter of demand. Because the debt and terms are already admitted, a summons and default judgment are much simpler. Claims up to R20 000 can go to the Small Claims Court without an attorney.
Free to fill in
Acknowledgement of Debt (AOD)
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Frequently asked questions
Is an acknowledgement of debt legally binding in South Africa?
Yes. A signed AOD is a binding admission that courts enforce, as long as it was signed freely and the debt is lawful.
Does an AOD need to be signed by witnesses?
Witnesses aren't legally required, but two witnesses make it much harder for the debtor to later deny signing.
Does an AOD restart prescription?
Yes. An express written acknowledgement interrupts prescription, and the 3-year period runs again from the signing date.
Can I charge interest in an AOD?
Yes, at a rate agreed in writing. Where the National Credit Act applies, interest and fees are capped, so keep it reasonable.
Do I need an attorney for an AOD?
Not for a straightforward debt. For large amounts, security over property or a debtor in financial trouble, ask an attorney to check it.
