Can You Get Credit after Sequestration? and Other Important Questions

One of the questions we often receive is “Can you get credit after sequestration?” Though the answer is yes, there is more to it, and we thus answer the question and related ones below, helping you to make an informed decision about the management of your financial estate.


Can You Get Credit After Sequestration Without Permission from The Trustee/Curator?

The answer is no. You need the appointed curator/trustee’s permission to enter into credit agreements. Indeed, failure to do so can mean that you may have to wait a few years longer before you can apply for rehabilitation after sequestration.


Can You Get Credit After Sequestration If You Do Not Declare Your Sequestration Status?

Though it is possible, it is also unethical and illegal. If the creditor asks whether you are sequestrated, you must answer truthfully. Failure to disclose your insolvent status when asked for such by a creditor when you enter a contract is punishable by imprisonment for a period not exceeding two years.


What Happens to Debt Incurred After Sequestration?

All assets required after sequestration become part of your insolvent estate. However, if you have obtained credit after sequestration, then the creditor has the right to claim against your new estate. The debt is thus not part of the insolvent estate.


What About Debt Incurred After Sequestration Without A Credit Agreement in Place?

It is possible to incur debt after sequestration without it being a credit arrangement. You may, for instance, cause a vehicle accident. The driver of the other vehicle institutes a claim against you for the damages related to the accident. You are thus in debt, but it is not a wilful act of entering into an agreement for credit without the permission of the trustee/curator. This is an incidental debt and not a credit arrangement.


Can You Get Credit After Sequestration Once You Have Been Rehabilitated?

Yes. You have a new estate. The insolvent estate is no longer relevant, and you are in control of your financial affairs. The notice of sequestration is removed from your credit record and replaced with rehabilitated. As financially rehabilitated, you can enter into credit agreements without needing permission from a curator/trustee.


Do You Still Need to Disclose That You Have Been Sequestrated When You Enter A Credit Agreement?

If a creditor asks whether you have been sequestrated before, you must answer truthfully. Indeed, you declare that information you provide on the credit agreement is true.

Call our attorneys for professional assistance with voluntary sequestration and financial rehabilitation.


Disclaimer: This article is for informational 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 to the date of publishing.

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