SEQUESTRATION & VEHICLES  

Will I lose my vehicle if I apply for Sequestration?
This must be the most frequently asked question when looking into the sequestration process. Sequestration and vehicles are not always the easiest to navigate, especially if you need your vehicle to get to and from work and the vehicle is still financed.

The biggest concern to each and every over-indebted individual is to be able to keep their vehicles. No one can get by without a vehicle in South Africa. Public transport is available to individuals in South Africa, but it doesn’t mean that it is very reliable.

There are no real answers here, but thanks to years of experience in this field we can confirm that the below mentioned scenarios are very relevant.

However, it will still depend on the appointed Curator / Trustee how they wish to deal with the matter.  Therefore, it is of utmost importance to ensure that you find a company that can help you navigate the negotiations in terms of your vehicle and provide you with the correct advice dependent on your specific situation.

What happens to your vehicle during Sequestration?

1. Vehicles on Hire Purchase / Finance Agreement
The Insolvency Act states that one creditor may not benefit above the other and by paying the vehicle payment but none of the other debts the one creditor, namely the vehicle financier is benefiting above the other creditors therefore any bank can repossess vehicle if you have a hire-purchase agreement on it.

2. In Arrear Hire Purchase / Finance Agreement vehicles
If you have paid all your payments on time, the bank may consider your request to keep the vehicle. There is no guarantee however that you will be able to keep your vehicle, especially if your payments are in arrears.

3. Vehicles borrowed from friends / family etc.
Vehicles that are registered in the name of another person or business will not form part of the insolvent estate.

4. Rent-to-Own Vehicles and Leased Vehicles
Rent-to-own vehicles and vehicles on a lease agreement and / or a rent-to-own option will not form part of the insolvent estate.  

Because these vehicles technically don’t belong to the individual driving them but to the institution that is rendering a rental service to the individual. Therefore, any vehicle on a rent-to-own or lease agreement will not form part of the Insolvent Estate.

5. Paid Up Vehicles
Vehicles that are paid in full and is registered in the insolvents’ name will form part of the insolvent estate. The Curator / Trustee will give you the option to buy back your vehicle from the insolvent estate. 

This is normally not a problem, but should the insolvent not keep up with the payments in terms of the agreement the Curator / Trustee will seize the vehicle and sell it on auction to cover the cost and the benefit to the creditors.

In Conclusion: 
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.