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F.A.Q

Attaining freedom from debt is exclusively achievable through the legal process of sequestration. Procrastination can lead to irreversible losses. Act now, before the situation worsens and you risk losing everything.

The process normally takes two months from consultation to your application being heard in court.

  1. That you have complied with all statutory formalities;
  2. That your estate is in fact insolvent;
  3. That you own a realisable property or vehicle or movable assets or earn a salary and;
  4. That it will be to the advantage of your creditors.

No, the Insolvency Act prescribes that your intention to sequestrate must be publicized by way of registered post to your creditors as well as by publication in the Government Gazette and a local newspaper. Once the publication has appeared in the Government Gazette and the local newspaper, no creditor is allowed to sell any of your assets, even if the execution process against you has gone so far that the Sheriff has attached your assets.

Yes

No!  It is illegal in our law to pay one creditor at the expense of another creditor.

No, Insolvency is not a criminal matter in South Africa, but rather a civil matter. Therefore, you will qualify for a visa and your immigration will be legal.

  1. Your clothes;
  2. Bedding;
  3. Tools of your trade;
  4. Other essential means of subsistence;
  5. Life-insurance policies;
  6. Pension benefits;
  7. Compensation for loss or damage suffered because of defamation or personal injury;
  8. Your salary or wages earned after sequestration

You buy back your furniture at valuation price as indicated in your application for the voluntary surrender of your estate. The furniture stays in your possession. Most of the trustees will allow you to pay it over a period of time. This mean that you can keep your movable assets like furniture, TV, etc

Yes, you will definitely be able to rent after you have been sequestrated.

Where the vehicle has been bought on HP, the creditors are not allowed to execute any legal proceedings against you once the adverts have been placed in the Government Gazette and the Local newspapers. Once the sequestration order has been granted and your Trustee appointed, the creditors will usually want the vehicle back. An arrangement will be made by your Trustee and yourself to hand the vehicle over. This process can take two to twelve months. You can in the meantime use the vehicle. If the bank obtained a warrant of delivery of your vehicle before sequestration you will have to surrender the vehicle to the sheriff.

There are certain positions which you are excluded from holding once you have been declared insolvent. You are for example unable to be a Director of a company, the Managing Member of a Close Corporation or an Actuary. With regards to your employment, you can only be dismissed if there is a condition in your Letter of Appointment in terms of which you are not allowed to be an insolvent whilst I the employ of your employer.

This is governed by Section 38 of the Insolvency Act. Sequestration suspends the contracts of service between you and your employees. There are two options that are available to you. You can either transfer the contracts to a new owner of your business or the contracts can be finally terminated.

You are allowed to enter into any contract which does not pertain to the assets that fall into your estate. You are for example allowed to enter into a cell phone contract, rental agreement, anti-nuptial contract etc. You are even allowed to enter into a credit agreement if you have disclosed that you are insolvent and the creditor is willing to grant you credit. You must also have consent from your trustee. The discretion lies with the creditor.

No, you have to stop payment as you are not allowed to prefer one creditor over another.

Yes, you will need to keep on paying the water and lights so that they do not cut your power and water supply.

Should you have leased property at the time of your sequestration, the lease agreement is not automatically cancelled by your sequestration. You will simply carry on paying your rent and you stay on the property.

SARS is preferent creditor in your insolvent estate. After you have been sequestrated you must apply for a new tax number. With this tax number you will start on a clean slate with SARS. All credits and debits that was due to and from SARS before the date of sequestration vests in your insolvent estate.

There is a misconception that the mere fact that you are a director of a company, member of a Close Corporation or Trustee of a trust makes you liable for the debt of that entity. You will only be liable for the debt if you have signed surety for it.

The rehabilitation process involves bringing an application to the High Court asking the court to relieve the insolvent of every disability resulting from sequestration. It ends the sequestration and discharges all the insolvent’s pre-sequestration debts. The insolvent will automatically be rehabilitated after the expiration of 10 years, but can apply at court to be rehabilitated after 1 year under certain circumstances but usually after four years.

The Trustee will not be involved in your life. His only job is to realise the assets which fall into your insolvent estate, where after a dividend is distributed amongst creditors.

The only difference would be that the client would be responsible for the payment of the Total value of his debt incurred to the value of 20c to the R. There is also a possibility that we might be in a position to arrange that the amount could be interest free and even payable over an 18-month period.

You are not allowed to have a cheque account. You should open a savings account at a bank where you don’t owe any money. If you owe a bank money and have any account with them, you should close it. Many banks withdraw money from your account, even if it is a savings account.

If you are unable to pay your living expenses and creditors you should apply for the sequestration.

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