How Sequestration Without Assets Works
Sequestration without assets is possible if the legal fees, estate administration, and minimum benefits requirement can be met. It still requires a legal application process. Keep in mind that voluntary sequestration – with or without assets – is a process that has been instituted specifically to help individuals in South Africa, who are no longer able to pay debts due as the result of circumstances that may have changed, including the individual’s financial or job status.
Voluntary sequestration without assets provides you with a means to regain financial composure and control over your life. This can be done through disciplined action to change your monthly spending to fit your income. Once the High Court has approved the application for a sequestration without assets, your creditors cannot harass you or take further legal steps against you. Should anyone try to harass you for a down payment agreement, you can simply refer them to your insolvency attorneys. The risk of an unwanted or unforeseen visit by the Sheriff to attach your furniture will also be something of the past.
What is The Procedure?
The attorneys publish the notice of intention to apply for sequestration without assets in the Government Gazette and relevant local papers. This stops any further legal actions against you. It also includes protection against the procedure for the seizure of your assets. They prepare the statement of debtor affairs, which you sign in front of a Commissioner of Oaths. The statement lists your debts. The attorneys then submit it for inspection to the Master of the High Court. It lies there for a period of 14 days. This statement can be lodged with the local Magistrate instead of the Master of the High Court.
With the statement forming such an integral part of the application for sequestration without assets, it is essential that it be accurate. Every creditor, the total owed, and any security for the debt must be listed. The attorneys also forward a notice of your intention to sequestrate without assets to the creditors. This is done by means of registered mail. Should the creditors require more information, they contact the insolvency attorneys. You also receive a copy of the letter that can be shown to creditors who harass you.
The attorneys notify SARS of the application, regardless of whether you are registered as a taxpayer or not. They also prepare a founding affidavit on your behalf. This document provides information as to the circumstances that have caused your financial distress. It also includes the latest statements from creditors on your outstanding debts.
An advocate is appointed to present your application to the High Court. You do not need to be present and the attorneys notify you of the outcome. Once the Court approves the application, the Master of the Court appoints a curator to oversee the sale of assets and distribution of proceeds to the relevant creditors according to the requirements of the Insolvency Act.
The curator is thus in control of your financial estate. You can expect a call to meet with the curator. You will be required to assist the curator with information. You may also be required to meet with the creditors along with the curator. It is imperative to attend the meeting. If you cannot do so because of where you stay, then a telephonic meeting can be arranged.
Where you do not have sufficient assets to ensure the sale of the assets can provide the minimum benefit required by law to be paid to the creditors, you can still pay the minimum benefit by means of instalments over a period of 18 to 24 months. Note that the curator must be satisfied with the arrangement along with the creditors.
No interest is added, making the instalments rather affordable. The legal fees and curator costs are also included in the minimum amount that you must pay, so you will not be caught off-guard. We recommend speaking to our attorneys about the amount payable, as it differs from province to province. Get professional help regarding sequestration without assets. Contact our insolvency attorneys for more information.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Call on our attorneys rather than relying on the information herein to make any decisions. The information is relevant to the date of publishing.