Answers on How to Get Rid of Debt with Voluntary Sequestration in Gauteng

We briefly answer some of the questions you may want to ask insolvency practitioners in Gauteng, helping you to gain insight into the sequestration process and how it affects your finances.

What is the procedure for voluntary sequestration in Gauteng?

Once we have determined that you are insolvent and qualify for voluntary sequestration, our insolvency practitioners in Gauteng will publish a notification of your intention to apply for voluntary sequestration in the local newspapers and the Government Gazette for three reasons:

  • The law requires it.
  • It prevents creditors from taking further legal action against you.
  • Creditors are made aware of the application and can lodge objections.

Our insolvency practitioners in Gauteng will draft a statement of debtor’s affairs, which you sign before a commissioner of oaths. It is a detailed list of your debts and creditors that must be accurate. We will submit it to the Master of the High Court or to the relevant local magistrate in Gauteng. We will also send a registered letter to each creditor to notify them about the voluntary surrendering of your estate, and you will get a copy to show creditors. We will also notify SARS.

We will draft a founding affidavit detailing the circumstances that led to the debt and your inability to pay it, which you will sign before a commissioner of oaths. Our insolvency lawyers will then submit it to court on your behalf; you do not have to attend the hearing. You will receive a notification about the outcome. Once the High Court has approved the sequestration application, a court-appointed curator will take charge of your estate and it will no longer be under your control. The curator will have a consultation with you, telephonically or in person.

The curator will oversee the selling of the assets in the estate and the distribution of the proceeds to the various creditors, according to the court order. Once all the creditors have received their benefits and the final liquidation and distribution account is submitted, the process will be complete. You can then apply for rehabilitation, if you meet the requirements.

What about attorney and curator fees?

The court will only approve the sequestration application if the sale of assets will provide for enough funds to pay at least 20-25 cents in the rand to each creditor, and if there are sufficient funds for payment of the administrative, legal, and curator fees. These fees are fixed and discussed with you prior to commencing with the voluntary sequestration application.

Can one pay the benefits amount over a period?

Yes. If the sale of assets does not provide for sufficient funds to pay the full benefits, you can pay the remainder over a period of 18-24 months. The instalments are usually low, because there is no additional interest. This can be done if the curator agrees.

How do I know which items to list?

Our insolvency practitioners in Gauteng will provide a document in which you will identify the assets, and in which you describe each item. We will forward this document to the official valuator, who will valuate your assets.

What will happen to my vehicle?

If your vehicle is under a hire purchase agreement, the bank will repossess it. If you want to keep your vehicle and arrange for instalment payments, arrangements must be made with the bank before you commence with the voluntary sequestration application. We recommend speaking to our insolvency practitioners in Gauteng to help you negotiate this before we commence with the sequestration application on your behalf.

Keep in mind that all the instalments must be up to date if you wish to follow this route. In addition, bear in mind that the bank may still decide to repossess the vehicle regardless of whether the instalments are up to date. If you lease the vehicle and you have a residual to make at the end of the lease period, the vehicle will not form part of the estate. Any vehicle that is not registered in your name is excluded from the surrendered estate. Any vehicle in your name that is paid up will form part of the estate.

What is the next step?

Make an appointment with our insolvency practitioners in Gauteng to discuss your particular financial situation and to assist you with the application for sequestration.

 


Disclaimer: Information is relevant to the date of publishing and is not intended as any form of legal advice. Please call on our attorneys for legal guidance, rather than relying on the information herein to make decisions – December 2017.

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