UNDERSTANDING SEQUESTRATION AND WHAT IT ALL MEANS
Understanding sequestration in South Africa and what it means is a topic that is explored by individuals and businesses facing financial difficulties. Seeking expert advice on sequestration and the process of applying for insolvency is crucial before making any decisions regarding your financial emergency.
Debt can feel like an insurmountable burden, weighing heavily on both individuals and families. In South Africa, where many face significant financial challenges, the sequestration process offers a legal pathway to debt relief and financial recovery. This blog delves into the sequestration process, explaining its benefits, steps, and considerations, helping over-indebted individuals to make informed decisions about their financial future.
The Sequestration Process in South Africa offers a viable path to debt relief for those facing overwhelming financial burdens. By providing legal protection, a structured debt resolution process, and the possibility of a fresh financial start, sequestration can help individuals regain control over their finances.
However, it is crucial to approach this option with a clear understanding of its implications and to seek professional advice to navigate the complexities involved. If you are struggling with insurmountable debt, consider exploring sequestration as a potential solution. It may provide the financial reset needed to pave the way toward a more stable and prosperous future.
Myths & Misconceptions about Sequestration
There are many misconceptions concerning sequestration and its effects on financially distressed individuals, corporations, and trusts. If they are unfamiliar with the process, they find it hard to trust.
What is Sequestration?
We've answered the question "What is sequestration?" as well as related questions below to help you understand all aspects of sequestration and what it means.
Sequestration is a legal process through which an insolvent individual (one who cannot pay their debts) declares bankruptcy.
How soon after the insolvency will I be able to partake in the economy again?
Upon approval of the rehabilitation application, the insolvent individual or trust is rehabilitated and is no longer insolvent. The rehabilitated insolvent will be able to take part in the economy once again.
After the rehabilitation application is granted,
All outstanding balances owed to creditors are written off after the insolvent estate is finalised and the rehabilitation order is granted.
This is a fresh start.
You start with NO DEBT once REHABILITATED AFTER SEQUESTRATION.
What happens to my movable assets during the sequestration process?There're two different options to choose from when dealing with movable assets in an insolvent estate.
TWO CHOICES:1ST CHOICE:
The movable assets will be seized and sold on auction to recover the amount due to pay the 10 - 25% of the total debt plus the master and curator fees.
2ND CHOICE:
The insolvent party can purchase his / her / their movable assets back from the insolvent estate.
What happens if I have immovable property?
Immovable property will be sold, whether it is bonded or paid in full. It cannot be bought back from the insolvent estate by the Insolvent.
What happens to my vehicle that is on a finance agreement?
Even if the vehicle is not in arrears and up to date and kept up to date, the insolvent will lose this vehicle, because the Insolvency Act clearly states that one creditor may not benefit above the other.
Therefore, if an insolvent is allowed to keep paying the vehicle monthly and to keep the vehicle, the financier for the vehicle is benefitting above the other creditors, because the vehicle debt is being serviced but none of the other debts are being serviced.
Are there instances where a vehicle that's on a finance agreement haven't been sold in the surrender of Estate?
Yes, there is instances where such an agreement has been honoured, but it is normally instances where it can be proven to the appointed trustee that the vehicle is necessary to transport special needs family members, for instance.
Where the vehicle was a necessity and formed part of the basic needs to subsist.
Is it a regular occurrence?
No, it is not something that happens a lot, but it can be arranged, if necessary. Consider that it's still the trustee's choice whether they will agree to such an arrangement or not.
When I go under sequestration does it mean that all my debt will be written off?
Up to 90% of the debt will be written off and the amount paid towards the creditors will be 10% - 25% of the total debt. The curator and the master fees will also be added to the calculation and the total amount due to the insolvent estate will be paid over a period as per agreement with the appointed curator.
What is the maximum payment period allowed to buy back the movable assets from the Insolvent Estate?18 - 24 months, dependant on the curator, your affordability profile and your monthly remuneration.
One frequently asked question is whether creditors can continue take legal action against the debtor before the sequestration process is finished.Once the applicant's application for sequestration is published in the Government Gazette and a local newspaper, creditors must file objections with the court. They are not permitted to harass the debtor, attach any asset, demand payment, or charge interest on the debt.
I made the decision to continue with the Sequestration Process do I still pay my creditors whilst I'm busy with the process?The applicant is not permitted by law to provide preferential treatment to one creditor over another. As a result, once the application procedure starts, the applicant/s must cease payment to all creditors.
How long before I get a court date?
It will depend on how quickly we can acquire a court date. Sooner is always better than later and as a result we prefer to apply for a Court Date as soon as possible. However, there is a certain criterion that needs to be met before we apply for a court date. We will discuss this in detail to ensure that you know and understand the criteria.
Is there a consultant that I can talk to that can explain the process to me in normal Afrikaans or English without the legal jargon?Once you complete our
Contact Us Form and one of our Debt Relief Specialists will contact you and explain the sequestration process and what it means to you.
What are the COSTS FOR CONSULTATION with one of our Debt Relief Specialists?FREE - R0.00 - NILL RAND...
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