Experienced Insolvency Practitioners in South Africa to the Rescue

Nothing can be scarier than having to face compulsory sequestration proceedings against you for debt. To this end, your first recourse is to seek legal help from experienced insolvency practitioners in South Africa.

Also, if you find that your debt is spiralling out of control, do not wait for judgments against you or for creditors to apply for your compulsory sequestration. Rather seek immediate help from experienced insolvency practitioners in South Africa.

To help you get started, let us look at some of the questions about insolvency in South Africa, giving insight as to how experienced insolvency practitioners can help you to become debt-free.


I Fear the Unexpected. What About All the Details That I Do not Know Before I Apply for Sequestration?

Fear of the unknown is also the reason why so many people end up agreeing to pay back debts with high interest rates, plus legal costs. They stay in the debt clutches for years. It is natural to be concerned about unpleasant surprises. That is also why it is important to make use of experienced insolvency practitioners in South Africa, who can help you avoid pitfalls, give you answers, and make sure even unexpected challenges can be dealt with swiftly and in a professional manner.


I Heard That if I Sell or Dispose of My Assets More than Six Months Before the Voluntary Sequestration, the Creditors Cannot do Anything? Is it True?

apply for insolvencyNo. The Insolvency Act states that the disposition can be set aside if the trustee is able to show that you have disposed of the assets, that you exceeded your assets after disposing of the assets, that a creditor was disadvantaged because of it, and that you intended to benefit one creditor over another. This is also reason to make use of experienced insolvency practitioners in South Africa. The six months before the sequestration rumour is untrue. Unless the disposition of the assets can be used to pay off all the debts and prevent one creditor to be preferred above the rest, rather seek legal help on how to enter into a debt compromise agreement with creditors.


Is it Possible to Start a Business While Under Sequestration?

You cannot be a director of a company or a managing member of a close corporation while under sequestration. You cannot hold a liquor licence or act as a general trader. However, the idea is not to make it impossible for you to earn an income. To this end, the trustee can provide you with permission to start a business. That said, the structuring of the business entity and various other factors must be considered. This is also best discussed with experienced insolvency practitioners in South Africa, since you will want to protect the assets and earning income of the business.


I Stand to Inherit Money and Property, but the Creditors Have Already Commenced with the Compulsory Sequestration Against Me. Will I Lose the Inheritance Even if I Only Receive it After Having Been Sequestrated?

Unfortunately, the answer is yes. Any inheritance forms part of the insolvent estate, even after you have been sequestrated. It will only be safe if you have been rehabilitated. To prevent the inheritance from becoming part of the insolvent estate, you can decline receipt thereof and rather have it go to one of the other family members.


What About My Pension? I Am About to Retire, but Face Compulsory Sequestration?

Your pension is excluded from the insolvent estate. You will thus not be left without a nesting egg once you have retired. Any garnishee orders against your salary will also be cancelled. Your salary and tools of trade are safe.


Will I Lose my Furniture, Jewellery, or Firearms?

It is a valid concern. Although strictly speaking, all the mentioned assets form part of the insolvent estate and will be written up, you will not necessarily lose the items. In terms of furniture and your firearms, our experienced insolvency practitioners in South Africa will negotiate with the trustee to have the items written up, but not removed. You will have the opportunity to buy back these assets from the insolvent estate at the very low auction valued price.

Several strict regulations regarding firearm storage and possession make it difficult for the trustee to store and sell firearms. As such, you will be able to buy back your firearms at exceptionally low prices without the firearms being removed from your possession.

In terms of jewellery, the expensive pieces will form part of the insolvent estate. Costume jewellery does not have much resale value and most probably will be dealt with in the same way as furniture. Since used furniture pieces do not usually sell for a lot, you can buy the items back. But priced furniture pieces, such as grandfather clocks, solid wood billiard tables, antique pieces, and Persian rugs will most probably form part of the insolvent estate. The same applies for jewellery.


I Am Scared That My Children’s Cycles and Game Consoles Will Also Form Part of the Insolvent Estate, How Can I Protect Their Assets?

Your children’s assets stay theirs. As such, you do not have to be concerned about inclusion of their toys and other assets belonging to them. However, it will be difficult to explain that the large chesterfield couch belongs to your child. We recommend seeking legal guidance from our experienced insolvency practitioners regarding the protection of assets belonging to your children.


What About my Overseas Immovable and Movable Assets?

Not only the assets in South Africa, but all your assets across the world are included in sequestration proceedings. The trustee can apply in the relevant countries to have the assets included.


I Am Afraid that I Will Lose My Job if my Employer Finds Out About the Sequestration. Will the Employer be Notified?

Our experienced insolvency practitioners understand how important it is to be employed in South Africa. They are discreet to ensure your privacy stays protected. Your employer will not be notified.


Will I Have Enough Time to Find Another House if My House Falls Within the Insolvent Estate?

Yes. From the time that the sequestration proceedings are initiated against you or that you give instruction for voluntary sequestration, you still have at minimum three months before having to move out. In many instances, the period is longer and can even be as long as five to six months.


What Happens to the Assets of My Spouse?

If you are married within community of property, then you share an estate. This means both of you will be sequestrated. If you are married out of community of property, then you have separate estates. Unless your spouse signed surety on a debt you owe, their assets are safe. That said, their assets are included in the insolvency proceedings. They have to prove that the assets belong to them. Consult with our experienced sequestration practitioners on how to protect the assets of your spouse in South Africa and overseas.


Will I Still be Able to Open a Bank Account?

Yes. Except for a credit card or a cheque account, you should have no problems with the bank. Do keep in mind that you must state that you are under sequestration when asked about it on any form. Lying about it can land you in extremely deep trouble. Rather avoid opening a bank account at the same institution where you owe money. Although the bank is not allowed to do so, chances are that the bank where you owe money will take any income in the account. It takes quite a battle to get the money back and they may repeat the process. Best course of action – open a bank account at another institution.


Where Can I Get Immediate Legal Help with Insolvencies in South Africa?

Get in touch with our experienced sequestration practitioners for professional help.


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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