How is Life After Sequestration?

Life after sequestration means being debt-free, and thus being able to save your money towards the application for rehabilitation. It also means not having to be concerned about creditor harassment, debt collection agencies, and how you will be able to pay your debt.

A common misconception about life after sequestration is that you are left without your vehicle and furniture. If creditors take judgment against you for debt, you risk losing more than your house. You risk losing your furniture, tools of trade, and your vehicles. Fortunately, when you undergo voluntary sequestration, the insolvency lawyers negotiate on your behalf to have your furniture bought back from the insolvent estate at a very low price. The furniture is never removed from your house, and as such, you will not experience the pain of having your family heirloom clock being sold on auction.

Life after sequestration also doesn’t mean being stranded without a vehicle. It is possible to negotiate with the bank for you to keep on paying for the vehicle and thus being able to drive it. The lawyers can also negotiate to have your fully paid vehicle bought back from the insolvent estate.

Your children’s furniture, books, bicycles and toys are also safe, since you are insolvent and not they. As such, life after sequestration doesn’t have to be painful.

Although you will not be able to enter into credit agreements without your estate curator’s written permission, it doesn’t mean that you may not enter into any type of credit agreement. It is, however, recommended to stay clear of debt until you have been financially rehabilitated. The reason is that you risk your financial freedom when you enter into such credit agreements. In addition, a prerequisite for the rehabilitation application after sequestration is that you must not have outstanding debt.

People also often think that life after sequestration means losing their cellphone contracts. As long as you keep on paying your cellphone service provider, you will be able to keep your phones and contracts. Television licenses are also excluded from the sequestration. In general, the service contracts remain. Keep in mind that traffic tickets don’t form part of the sequestration, and you must thus still pay all outstanding traffic fines.

You don’t have to be under sequestration for ten years. Indeed, the normal timeframe is about four to five years before people can apply for financial rehabilitation. However, it is possible to initiate the application process soon after the sequestration, provided that all the requirements are met.

One such a requirement is that the curator must have received their full payment. Another is that the insolvent estate must have been finalised, including benefits distributed to the relevant creditors. There may not be any further claims against the estate.

To start the process, make an appointment with our insolvency law attorneys who will help you determine if you qualify for financial rehabilitation, and whether the timeframe requirements have been met. They will draft an affidavit to the effect, which you will sign in front of a Commissioner of Oaths.

They will request reports from the insolvent estate’s curator and from the Master of the High Court. Once received, they will publish a notice in the Government Gazette regarding the financial rehabilitation application, and once the court grants the rehabilitation order, they will then contact the various credit bureaux and send a copy of the rehabilitation order to each. The credit bureaux will change the status of sequestrated to rehabilitated. This normally takes 21 to 30 days.

You will then be able to regain financial control over every aspect of your finances. Life after sequestration thus has benefits, such as being debt-free. It also has some drawbacks, such as needing permission from the curator to enter into credit agreements, and not being able to act as a company director. With financial rehabilitation completed, you will once again be able to do the above without any permission required.

The process for financial rehabilitation may sound complex, but is actually a rather straightforward legal process. You don’t have to appear in court and only have to submit the affidavit. The rest of the work is done by the lawyers.

What Next?

Become debt-free with voluntary sequestration, and get legal help with financial rehabilitation. Call on our lawyers to help you through the process.

Disclaimer: The information in this article is for information purposes only and not intended as legal advice. We strongly recommend that you seek professional legal advice before solely relying on the information herein. The information supplied is relevant to the date of publishing – August 2017.