STEPS TO APPLY FOR SEQUESTRATION IN SOUTH AFRICA
Below is a summary of the steps to take to apply for sequestration in South Africa. However, let us first look at what sequestration is. Voluntary sequestration is a legal process whereby you as individual apply to court to be declared bankrupt. Your estate is surrendered to the court and a curator is appointed to manage the sale of assets and distribution of benefits to the creditors. Once the process is completed, you are debt-free and able to rebuild your financial estate.
If you want to apply for sequestration, you must have sufficient assets to ensure the sale thereof will bring enough benefit to the creditors and will be sufficient to pay for the sequestration process. Keep in mind that the court will approve your application only if you can prove, when you apply for sequestration, that your expenses far exceed your income, and your liabilities far exceed your assets. It cannot be used a quick fix to get rid of debt simply because it will be more convenient for you.
Step 1 – Determine Insolvency
Complete the form we provide or discuss your debt with our attorneys, who will help you determine if you can apply for sequestration. You will be required to list your income and expenditure, and your assets and liabilities. We will perform a debt analysis and, if you qualify and it is the best option for you, we help you apply for sequestration.
Step 2 – Consultation
During the consultation, we will answer your questions and help clear up any uncertainties. You are welcome to make a list and email your questions if you have not found the answers on our website. We will advise you on how to structure your assets to legally increase the value of your estate, should you not qualify for sequestration. We will furthermore discuss how you can buy back your assets and what timeframe can be expected.
Step 3 – Statement of Affairs
You will need to submit a statement of affairs. We will draft it on your behalf, but will require the following information:
- List of creditors.
- Contact information of each creditor.
- Postal address of each creditor.
- Total debt to each creditor.
- Monthly instalments.
- Balance outstanding.
- Reason for each debt, like lease agreement, financing of assets, goods purchased, cash advance, etc.
- Confirmation about security offered for the debt owed to each creditor.
Step 4 – Founding Statement
To apply for sequestration, you also need to draft a founding statement. We will handle this on your behalf. It covers the circumstances of your indebtedness, motivation for sequestration, some legal aspects, and the level of indebtedness.
Step 5 – Determining the Value of Your Assets
We will forward a provisional statement of affairs to you and discuss shortcomings and areas where corrections must be made. You will sign the document and return it to us. We will also evaluate your assets.
Step 6 – Sign Statement of Affairs and The Affidavit
After corrections and changes have been made to the affidavit and the statement of affairs, we will submit the documents to you for signature in front of a Commissioner of Oaths.
Step 7 – Notifying Creditors
We will make duplicates of the above and draft the notifications for publication in the relevant newspapers and the Government Gazette. Once the notifications have been published, you will be protected against attachment of your assets and any further legal action from creditors. You will cease all payments to the creditors. The court date will also be advertised.
Step 8 – Submission of The Statement of Affairs
We will ensure delivery of the statement of affairs to the Master of the High Court and, where relevant, to the Magistrate’s Office. The creditors will also receive notification, as well as the South African Revenue Services. We do not notify your employer.
Step 9 – Notice of Motion
We will issue the notice of motion whereby we reserve space on the court roll for the hearing of the application to sequestrate.
Step 10 – Submitting the Application
Copies of the application will be made, and one submitted to the Master of the High Court, another to SARS if needed, and the original to the Registrar of the High Court. Our advocate will receive a copy and the necessary instructions.
Step 11 – Court Hearing
The advocate will apply for sequestration on your behalf and once awarded, the court will appoint a curator to oversee the sale of assets and distribution of benefits to the creditors.
Step 12 – Rehabilitation
You will be under sequestration and can apply for rehabilitation 12 months after the final distribution account has been submitted.
Email or call us should you have any other questions not answered on our site if you want to apply for sequestration.
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 publication – January 2018.