Sequestration Attorneys: Crucial Facts Everyone Should Know About Rehabilitation

Sequestration rehabilitation attorneys assist clients who have been sequestrated and wish to regain control over their financial estates. To understand the significance of rehabilitation, let us consider the effects of sequestration first:

  • Up to 80% of the debt is written off because the sale of assets must provide for a minimum of 20 cents out of the rand. This means that if a debtor owes R100 000, the sale of assets and distribution of benefits to the creditors must provide enough funds to cover the cost of sequestration and provide creditors with the minimum of R20 000 from the R100 000.
  • From the original debt of R100 000, the debtor thus only has to pay R20 000. It can make an enormous difference to a person who has to live through the nightmare of debt piling up.
  • The debtor is free to start over without debt, and thus gets a new beginning.
  • Once the notice of intention to sequestrate has been published, the debtor must stop all payments to the creditors to prevent one creditor from gaining a benefit to the disadvantage of the other creditors. In effect, the debtor can thus immediately sleep better, knowing that creditors may not harass them for instalments.
  • It is not a painless process as the debtor does lose assets in the process, but it does provide a relatively fast and legal mechanism to get rid of debt.
  • All garnishee orders against the debtor’s salary are cancelled.

 

Sequestration also has its downside. Because of the impact on the insolvent’s legal capacity, it should be the last resort in dealing with mountains of debt:

  • The debtor cannot hold certain government and financial officer positions.
  • They may not be a director of a company or member of a corporation.
  • The insolvent party may not enter into credit agreements without the written consent of the trustee/curator.
  • Any inheritance money received after sequestration, but before rehabilitation, forms part of the insolvent estate.
  • The credit record of the insolvent party shows that the person has been sequestrated. This can severely hinder the person’s ability to rent a place or find a job.
  • Even after rehabilitation, the party must still answer truthfully on any credit application if asked whether they have ever been sequestrated.

 

Understanding the effects of sequestration, it becomes clear why it is vital to apply for rehabilitation with the help of experienced insolvency attorneys, as soon as legally and financially possible. Rehabilitation is automatic after ten years, but waiting an entire decade to be able to regain full financial control is a long time.

You do not have to wait that long. With the help of our attorneys, you can regain financial control over your estate. The effects of rehabilitation are:

  • End of the diminished legal capacity associated with insolvency.
  • Change of notice on the credit record to indicate “rehabilitated”.
  • The rehabilitated status stays in place for five years. The sooner one applies for such with the help of attorneys, the better.
  • Freedom to enter into credit agreements without the permission of a trustee.
  • Freedom to accept inheritance money without fear of such being used to service the claims of creditors.
  • No further claims from creditors related to the insolvent estate.
  • Right to be a director of a company or member of a close corporation.

 

The attorneys handle the rehabilitation application. Indeed, with a cash sequestration, the debtor can almost immediately apply for rehabilitation.

To ensure you qualify for sequestration rehabilitation with the help of our attorneys, cooperate with the trustee/curator in terms of:

  • Attending the meeting with the creditors.
  • Providing information when requested.
  • Reporting back to the trustee/curator.

 

Refrain from actions that can be deemed fraud like:

  • Hiding assets from the trustee.
  • Not listing all creditors with claims against the estate.
  • Entering credit agreements without permission from the trustee.

 

Consult with our attorneys for more information about the requirements to be rehabilitated, helping you to determine the soonest date at which you can apply for such.

End the effects of sequestration and gain the benefit of being in control of your financial affairs. Get in touch with our attorneys to find out if you qualify for the rehabilitation of your estate.

 


Disclaimer: This article is for information 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 as at the date of publishing.

CONTACT US
close slider