Rehabilitation After Sequestration

THE REHABILITATION PROCESS AND WHAT IT ENTAILS

Rehabilitation after Sequestration is a High Court Application, and a remedy available to the insolvent after the Insolvent Estate have been finalised by the Curator and the Master of the High Court. This remedy is regulated by the Insolvency Act 24 of 1936.

The Insolvent will approach the High Court with an Application for Rehabilitation where he/she must convince the Court that the Administration of the Insolvent Estate is completed and that he/she is indeed no longer Insolvent.

Once the Rehabilitation Application is granted the Rehabilitated Insolvent will be allowed to trade as usual and apply for loans, should he/she wish to do so. He/she will be able to rebuild their Credit Profile.

Why do I need to Apply for Rehabilitation after Sequestration?

Whilst an individual’s legal status is Insolvent, they’re not allowed to take part in the economy. This basically means that an individual that’s insolvent may not take on any new debts whilst still Insolvent, for instance buy a new vehicle or a property.

Therefore, it is necessary to Apply for Rehabilitation as soon as possible after date of Sequestration to be able to take part in the economy again.

For which period will my status be Insolvent after the Sequestration Order have been granted?

The Insolvent status of an individual will stay that way until such time that an Application for Rehabilitation have been granted in the High Court of South Africa or until the statutory period of 10 years from date of Sequestration have lapsed, whereafter the Insolvent will automatically be Rehabilitated.

When will an insolvent be able to Apply for Rehabilitation?

In most cases an approximate period of 3 – 5 years from date of Sequestration, dependant on whether the Insolvent qualify to the criteria as set out in the Insolvency Act, Act 24 of 1936.

A proper assessment will need to be done to ascertain when the Insolvent will be able to Apply for Rehabilitation.

Therefore, it is suggested that you contact a Debt Specialist to assist you in this endeavour to ensure that the criteria in terms of the Insolvency Act have been meet before Applying for Rehabilitation.