Sequestration

What Is Sequestration?

Sequestration is the only legal process to have your debt written off.

The Insolvency Act governs the process. If you are an individual and want to declare yourself insolvent, you need to apply for Sequestration. In simple terms, if an individual’s debt has become too great or impossible to manage, and the person’s liabilities exceed their assets, the individual is insolvent (bankrupt).

The purpose of Sequestration is to give an honest debtor a “fresh start” in life by relieving them of their debt.

We will give you back your life and give you an entirely fresh start.

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A Sequestration Court Order can only be granted by the High Court and is therefore not a Free Application.

One of the objectives for Sequestration is that the process needs to benefit your creditors.

In other words, they need to get something back of the finances that they gave to you.

You can apply for Sequestration with an asset.

This means you have a vehicle or bond in arrears or cannot afford the instalment. The asset will be sold in the estate to settle the creditors.

Please do not be scammed by people saying you can keep your asset during a Sequestration. The bank will not allow it. Or worse, please do not hide assets from us. The Trustee will trace them, and you will still lose them in the process.

You can also apply for Sequestration if you do not have an asset.

You will need an income to arrange to pay an affordable monthly instalment.

This instalment is calculated according to your personal debt situation, and there is no “one size” fits all.

We can help you

Have immediate financial relief at the end of the month.
Provide protection from creditors taking legal action.
You will not appear in Court at any time during this process.
You will drive your bank-financed vehicle for a time before it is sold.
You will live in your property for a time before it is sold.

Who can apply?

Anybody who has an income and is over-indebted i.e., unable to pay their creditors on time, in arrears on one or more accounts, will qualify for Sequestration.

Why declare yourself insolvent?

You cannot afford your debts on your current income.
You have debt from an asset that was repossessed.
You have a large amount of debt that is going to take more than 5 years (excluding your home loan) to pay back.
You cannot afford your asset (Home or Vehicle) and are willing to lose it.

Benefits of Sequestration

Your salary and other income will be your own. Once we start with the Sequestration process, you will stop making payments to all known creditors, as Insolvency legislation prescribes that you may not prefer one creditor over another.
Your creditors are notified of the Sequestration, but you don’t need to notify anyone else, not even your employer.
You will no longer be liable to your creditors for all your outstanding debts. Keep in mind that you need to prove that the Sequestration will be to the advantage of the creditors.
Once the notice of voluntary surrender is advertised in the Government Gazette and local newspaper, all execution sales against you will be stopped which means your creditors may no longer sell your assets in execution.

Disadvantages of Sequestration

These are minimal when compared with the advantages.
Your credit worthiness will be affected – that is, you will not be able to obtain credit/loans etc. from financial institutions, until you have been rehabilitated.
You cannot be a Director in a company until you have been rehabilitated.
You will lose your property/bond.
You will lose your vehicle on HP at the bank.
You cannot own an asset until you have been rehabilitated.

How do I know When to apply for Sequestration?

Yes

YES you should Sequestrate

You can’t afford your debt every month.
The bank has auctioned your house, and there is a shortfall.
The bank has repossessed your car, and there is a shortfall.
Your business failed, and your current salary is taken up with repayments.
You were without work for some time, and now you are playing catch up.
You got divorced and were left with the debt (yes, it happens to both men and women).
You are in arrears at SARS.
You are paying debt older than 3 years.
You are under Debt Review, and the debt is not decreasing.

Maybe

MAYBE you should Sequestrate

You cannot afford your vehicle, or the bank will repossess your vehicle soon.
You cannot afford your bond payment, or our property is going up for auction.

NO you should probably NOT Sequestrate

You have a vehicle on HP, and it is your only form of transport.
You have an outstanding bond, and you have no other means of accommodation.

NEED TO APPLY FOR SEQUESTRATION?

Our consulting process is simple

We get to know each other. To determine whether you qualify for Sequestration (With or without an Asset), we will first ask you several questions to understand your financial situation.

We need to thoroughly understand your unique situation and needs as you consider applying for Sequestration. It is also essential that you also fully understand the entire legal process you will be a part of.

If Sequestration is an option for you, we will send you an assessment form to complete. The form gives us more information on your debt situation to develop a comprehensive plan and start to discuss costs and affordability

Our attorney will provide the costs for the Sequestration and the repayment period. This could be 12 to 18 months.

We will set up a meeting with you to discuss the legal process and costs. We prefer to meet our clients in person, and if you can travel to our offices in Centurion, we will set up a meeting that will last roughly an hour.

If it is not possible for you to attend a meeting at our offices, we will set up a telephone call or use an online platform.

During this meeting, the Sequestration legal process, applicable to your individual situation, will be explained to you and the payment plan that we can help you with.

When you decide that Sequestration is the process you want to follow, Ursula Gouws and her team will be with you from start to finish to support you and ensure that your needs are also met.

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The Legal Process

An advert is published in the Government Gazette that will prevent any legal action from being taken against you. The court will then allocate you a court date.

Once the advertisement is placed, you are under the protection of the Insolvency Act 24 of 1936.

The attorney drafts an Ability statement, and you have to sign it before a Commissioner of Oath. This statement must be submitted for inspection at the Master of the High Court and the local Magistrate’s Court for 14 days.

Your creditors will be informed of the surrendering of your estate via registered mail. SARS will also be notified. The attorney will handle all legal application documentation.

An advocate will represent you when your case has to be heard in Court.

Once the Court has approved and granted your application, a Curator/Trustee is appointed to handle all the financial matters concerning the Sequestration, and the credit settlement process starts.

The settlement process can take anywhere from a couple of months to years. Once all creditors’ claims have been settled, the Curator will provide a document stating that the insolvent estate has been satisfactorily concluded, and you can apply for rehabilitation.

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Rehabilitation

We can attend to your Sequestration Rehabilitation if you have been under Sequestration for at least 2 (two) to 4 (four) years.

Rehabilitation is the process where somebody who has been sequestrated is restored fully to the marketplace. They regain control over every aspect of their finances.

As soon as you rehabilitate, the adverse credit information (about the debt incurred before Sequestration) is removed from the Credit Bureau, and your status will be changed from Sequestrated to Rehabilitated.

The status will be indicated for the next 5 years that a notice of your Sequestration Rehabilitation was received.

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