How Rehabilitation to Clear Your Name Works

Voluntary sequestration is the process whereby you apply to be declared insolvent. Your estate is surrendered and the assets in it sold to ensure benefit to the creditors. Once the debt has been paid, you can apply for rehabilitation to clear your name and thus to restore your status. Without rehabilitation to clear your name, you will have the status of “sequestrated” for a period of ten years. During this time, you will need permission from your estate’s curator to enter into credit agreements. You will have to disclose that you have been sequestrated and you will not able to be a director of a company or hold membership of certain professional bodies. Your ITC status will show that you are under sequestration.

It is important to cooperate with the curator throughout the sequestration process, since the curator must give permission for the application for rehabilitation to clear your name. The curator can also set particular requirements to help manage your estate finances while you are under sequestration. You may need to submit monthly statements of income and expenditure or attend meetings with the curator. It is crucial that you cooperate with the curator on all the requirements to ensure that the curator will give permission for your application for rehabilitation to clear your name as soon as possible.

Document Requirements

The curator will draft the liquidation and distribution account and submit it to the Master of the High Court. Once approved, you can commence with the application for rehabilitation needed to clear your name. You can do so after a period of four years has lapsed after the sequestration date, and once the liquidation and distribution account has been approved by the Master of the High Court. You can apply one year after the final liquidation and distribution account has been approved by the Master of the High Court, but it is rare for the Court to approve the rehabilitation that soon. We recommend speaking to our attorneys about the requirements to do so. In the instance where fixed property formed part of the sequestration and there is a shortfall to be paid, you must first do so before the curator will give permission for rehabilitation.

For successful rehabilitation to clear your name, the Court must receive the first and final liquidation and distribution account, the certificate of the curator appointment, the Article 81 report, the letter regarding the first and final liquidation and distribution account, and the date at which it was confirmed by the Master of the High Court. If there were claims against your insolvent estate with a shortfall, a period of 12 months must have lapsed after confirmation of the liquidation and distribution account by the Master of the Court.

Keep in mind that, if judgements were taken against you, a period of five years must have lapsed before the application for rehabilitation to clear your name can be submitted. In the instance where there were no claims against the insolvent estate and it is the first time that you have been sequestrated – and first time that you have applied for rehabilitation with no judgements against your name – you can apply for rehabilitation immediately after the confirmation of the liquidation and distribution account by the Master of the Court.

The Process

Once we have the required documents, we publish a notice of your intention to rehabilitate in the Government Gazette. You will also sign an affidavit in front of a Commissioner of Oaths. We will then request a report from the Master of the High Court and the curator, which will provide the necessary approval for application to rehabilitate. A court hearing date will be set and an advocate will present your application for rehabilitation to clear your name in court. You will not have to appear in court. The order will be granted for rehabilitation. Once received, we will send a notice to the relevant credit bureaux in South Africa. It will be accompanied by the sequestration order, the letter for rehabilitation, a list of the creditors, and a certified copy of your ID. The various bureaux will then update their records. Once done, the rehabilitation process will be completed, and your name cleared. Your ITC status will then show “rehabilitated” instead of “sequestrated”. It will remain so for a period of five years.

Call on our attorneys to explain the rehabilitation process to clear your name and to assist you with application.

 


Disclaimer: This article is for informational purposes only and does not constitute legal advice. You are advised to consult with us before using/relying on this information. Information is relevant to the date of publishing – March 2018.

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