INSOLVENCY & IMMOVABLE PROPERTY

Insolvency and immovable property are definitely a topic that's quite relevant and searched for on online platforms.  This just proves once again that even though the pandemic passed, there are still many people struggling financially and searching for effective debt relief solutions. 

More and more people are suffering financial hardships, and many are property owners.  Therefore, many are considering sequestration as a debt relief solution to rid themselves of the debt but are uncertain whether they will lose their immovable property in such an application. 

There is an unsurmountable number of individuals who inquire about insolvency and immovable property. The normal questions involving this topic is:

• Will I lose my property if I want to declare myself bankrupt?
• What if my property is paid in full, will I still lose it?

The answer to both these questions are unfortunately YES no matter whether the property is paid in full or still have a bond registered on it, you will lose this property in the insolvent estate.

• The next question is:

I’m divorced and I am still registered as co-owner in an immovable property. The property however was granted to my spouse during the divorce. How will this matter be dealt with, and will my spouse lose the property because he/she did not have the funds to transfer the property into their name in totality at the deeds office.

• The answer:

Immovable property is frequently registered in the names of spouses who were once married in a community of property, but who later got divorced, and one of the spouses is declared insolvent.

The Question:

Who is entitled to deal with the immovable property?

1. Is it the person / spouse entitled to such property in terms of the divorce agreement.


2. Is it the trustee appointed in the insolvent estate of the former spouse.

For the purpose of this explanation, we will have a deeper look into the judgement of Corporate Liquidators vs Wiggill.

Mr and Mrs. Wiggill was married in community of property. They bought a property together whilst still married. But Mr & Mrs Wiggill Divorced after the purchase of the property. The property was granted to the spouse in the Divorce. The Settlement agreement were made an order of the court and therefore a legal document.

Mrs. Wiggill however did not transfer the property into her name yet. When Mr. Wiggill together with his new wife decided to follow the Sequestration route, the property was still registered in both Mr. Wiggill’s name as well as the previous Mrs. Wiggill’s name.

According to the Deeds Office 50% of this property still belonged to Mr. Wiggill, but the divorce decree which was made an order of the court stated that the property belongs to the 1st Mrs. Wiggill.

This complicated things for the appointed trustee in the matter since they wanted to seize the property and sell it on auction to cover the claims from the creditors and their costs. They informed the court that the property formed part of the insolvent estate of Mr. Wiggill.

When the ex-spouse wanted to transfer the property into her name, the curator refused to grant her permission for the transfer to be concluded.

CONCLUSION:
The short answer. Mrs. Wiggill won the case and the appointed Trustee had to transfer the property in her name.

REASONS:

Even though the property was registered at the deeds office in both Mr. and Mrs. Wiggill’s names it was clear from the court order that Mrs. Wiggill was granted this property in the divorce. When the divorce occurred Mr. and Mrs Wiggill’s combined estate became two separate estates. Mrs. Wiggill had her estate and Mr. Wiggill had his estate.

The Immovable property formed part of Mrs. Wiggill’s estate and therefore when Mr. Wiggill and his new wife declared bankruptcy the property did not form prat of Mr. Wiggill’s estate any longer.

Therefore, after the divorce, when Mr. Wiggill continued with the sequestration process and the property was still registered in both Mr. and Mrs. Wiggill’s name, it complicated things a bit.

The trustee knew this, but decided to take a chance and hopefully try and win the matter since Mrs. Wiggill neglected to transfer the property in her name. Mrs. Wiggill could have saved a lot of money and stress if she just transferred the property into her name once the divorce was finalised.

When the trustee applied for an order from the court to sell this property as part of the insolvent estate, Mr. Wiggill already alienated his share of the property in the divorce when he signed the settlement agreement in the divorce.

Taking the above into consideration it is of utmost importance to find the right company to assist you in this endeavour to ensure that the matter is dealt with in a professional manner and a reputable company that will provide you the correct information pertaining to your financial situation.

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