Sequestration Specialists — Answers Regarding Insolvency in South Africa

Voluntary sequestration is often seen as a last resort when it comes to debt management, simply because people do not understand the proceedings, benefits, and implications. Rather than relying on hearsay, we recommend seeking legal guidance from specialists to determine if voluntary sequestration is a workable solution for your debt problems in South Africa.

Below are answers about insolvencies and rehabilitation after the process. For professional guidance, we recommend speaking to our specialists.

Which Employment Positions Are Excluded for Insolvent Parties?

If you are sequestrated, you cannot be a director of a company or hold a fidelity fund certificate from the Estate Agency Affairs Board. This means that you cannot be an agent or principal of a realtor company while under sequestration. You may not be a trustee of a trust, though exceptions exist, which are best discussed with our specialists. You may not register as a manufacturer or distributor of liquor, and as such, cannot hold a liquor license. You may not be a member of the National Council of Provinces or the National Assembly of Parliament. You may not act as manager in a close corporation of which you are a member.

Is Property Obtained After Sequestration, But Before Rehabilitation, Part of The Insolvent Estate?

Yes. Any property that you get after the sequestration, before you are rehabilitated, forms part of the insolvent estate. This means the property can be sold by the curator/trustee to pay you debts unless the Insolvency Act excludes the property.

Are Necessities Also Part of The Insolvent Estate?

It is best to discuss items excluded from the insolvent estate with our specialists. Clothing, children’s assets, bedding, tools of trade, pension money, and money received as compensation for a personal injury are excluded.

Are Furniture and Jewellery Excluded from The Insolvent Estate?

No, but you can buy back the furniture at the low auction value. Our specialists negotiate on your behalf to have the furniture written up, but not removed from your home. You then buy the furniture from the insolvent estate. When it comes to jewellery, only the valuable items are included. Costume jewellery does not have sufficient auction value, and as such, you can expect to have the jewellery excluded. However, a R20 000 diamond ring certainly has value and thus forms part of the insolvent estate.

What Happens to Inheritance Money and Assets?

Inheritance money, property, and other assets form part of the insolvent estate. Speak to our specialists about inheritance assets. You can refuse to accept the inheritance and thereby protect such from being sold on auction. This also pertains to inheritance assets received after the sequestration, but before rehabilitation.

What Happens to Assets Belonging to My Spouse?

If you are married in community of property, you have one estate. This means you are both declared bankrupt and all your assets shared form part of the insolvent estate. Where you are married out of community of property, regardless of whether married with the accrual clause, your spouse must be able to prove which assets belong to him/her. To this end, seek legal guidance from our specialists to ensure the protection of assets belonging to your spouse.

Which Documents Are Required for Rehabilitation?

You need a sequestration order, the Article 81 report, the first and final liquidation, and distribution account from the trustee/curator, and the certificate of appointment of the curator/trustee. You also need the enforced letter of the above in addition to the date of enforcement of the account by the Master of the High Court.

Why is It Important to Maintain Good Report with The Curator?

In order to apply for rehabilitation, you need the written permission of the curator. If you, at any time during the process, fail to cooperate, the curator can reject your application request. The curator is appointed to oversee the insolvent estate, and as such, considers your financial behaviour throughout the period. The curator may set specific requirements to be met, such as monthly meetings or submissions of your income and expenditure statements. It is essential to cooperate with the curator if you want to apply for rehabilitation as soon as legally possible after the sequestration.

Where to Get Professional Help?

Call on our specialists for more information and legal assistance.

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 to the date of publishing.

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