When to Consider Voluntary Sequestration in South Africa
Sequestration in South Africa is certainly not the first choice when it comes to addressing the debt burden, but if you have already reached the point where even normal debt restructuring and debt review are no longer valid options, then it is time to get rid of the debt once and for all.
Debt has a way of building up. First you purchase a house and vehicle, and then follows another vehicle. School fees increase every year, and you may also have a child studying at college. Clothing accounts, furniture down-payments, credit cards, personal loans, overdraft facilities, medical expenses and more eventually take up every cent in your account. Before you know it, your liabilities exceed your assets, and you are unable to pay debts when due.
You are not the only one. Thousands of South Africans cannot afford the high living costs anymore. In order to make ends meet, they use their store cards to the maximum and open even more store accounts. The high interest rates on these cards eventually cause debtors to default.
We understand and can help you to start fresh with no debt through the voluntary estate surrendering process.
Yes, your credit record will show that you are under sequestration in South Africa and you will not be able to enter credit agreements without the written permission of the trustee/curator. You will not be able to hold certain government positions and cannot be a director of a company. Your paid-up vehicles will form part of the estate.
However, up to 80% of your debt will be written off as the creditors must receive at least 20 cents out of the rand benefits. This means 80 cents out of the rand are written off. The cost of the sequestration must be covered through the sale of assets. Once the process has been completed, you are debt-free. No creditor harassment and no debt. You have sufficient funds available to restructure your finances and start living without debt.
The normal duration of sequestration in South Africa is a period of four years, but it is possible to rehabilitate earlier. Speak to our attorneys about the requirements. Once rehabilitated, you have full control over your financial estate and the effects of the sequestration come to an end. Instead of going deeper into the debt spiral, address the issue effectively through the voluntary surrendering of your estate. Several options are available, which are best discussed with our legal team. Get in touch to find out if you qualify for the voluntary surrendering of your estate.
Disclaimer: This article is for information purposes only and does not constitute legal advice. Call on our attorneys for legal advice, rather than relying on the information herein to make any decisions. The information is relevant as at the date of publishing.