When Can You Apply for Rehabilitation After Sequestration?

Debt rehabilitation after sequestration can be done after a specific period has lapsed, and is subject to certain conditions being met. Note that if you don’t apply for debt rehabilitation after sequestration, then it will take ten years before your estate will automatically be rehabilitated.

If your rehabilitation application is successful, then the court will declare that you no longer have the status of insolvent. This will enable you to enter into contracts and credit agreements, without the permission of your curator. You will also be able to serve as a director.

The Insolvency Act Sections 124 and 127A deal with the debt rehabilitation of an insolvent party. Section 124 is important if you want to apply for rehabilitation before the ten-year period has passed. Section 127A is relevant after the ten-year period.

Timetable for Debt Rehabilitation

You are entitled to rehabilitation from sequestration at any time after the Master has issued a certificate to the effect according to Section 118(7) of the Insolvency Act. Such a certificate will show that three-fourths of the creditors who have proven claims against your estate have received benefit of at least 50 cents of the rand, all costs of the sequestration have been covered, and interest has been paid.

You can also apply for debt rehabilitation six months after the sequestration if you have been sequestrated for the first time, if at the time of your application there has been no claim proved against your estate, and if you have not committed any type of offences that would bring into effect Section 124(2) of the Act.

It is also possible to bring an application for debt rehabilitation from the sequestration twelve months after confirmation by the Master of the first liquidation and distribution account. This applies if you have been sequestrated for the first time, provided that you have not been convicted of any offences that would bring Section 124(2)(c) of the Act into effect, and that a minimum of four years has passed from the date of sequestration, with the exception of a recommendation for an earlier period by the Master.

You may also bring an application for rehabilitation three years after the first liquidation and distribution account confirmation by the Master, if you have been sequestrated before, provided a period of four years has passed since the sequestration date, unless otherwise recommended by the Master, and provided you have not been convicted of any offences which would bring Section 124 (2) (c) of the Act into effect.

If you have been convicted of a fraudulent act regarding your current or previous insolvency, or an offence under Sections 132-134 of the Insolvency Act, you can only apply for rehabilitation from your insolvent debt status according to Section 124 (2)(c) of the Act when a period of five years has lapsed since the conviction.

The ten-year period comes into effect if you have not been rehabilitated before the ten-year mark. Under Section 127 A (1) of the Act, it is an automatic process and you don’t have to complete forms or apply to court for rehabilitation.


Your credit record is not automatically amended at ITC. This means that if credit bureaux failed to remove a judgment against you even after it has been fulfilled, you will need to get legal assistance to get it removed. Our insolvency attorneys will submit copies of the rehabilitation order to the various credit bureaux, and help ensure the removal of the sequestration status, although the rehabilitated status will remain for a further five years.

What Next?

Make use of our experienced insolvency attorneys if you have been sequestrated and wish to benefit from debt rehabilitation in terms of the sequestration status.