Voluntary sequestration is not always first on your mind when thinking of workable debt solutions in South Africa. You may think that opting for a debt consolidation loan may be a better option at first. However, consider how easy it is to get further into debt with such a loan. All your other debts, such as store accounts, are paid in addition to your credit cards, but now you have a large loan to pay back. The interest rate may also be high.

In addition, you may have more cash at hand, and may, once again, consider going into credit agreements while you still have the debt consolidation loan to pay. The problem is that you cannot solve debt with more debt. This brings us back to voluntary sequestration as one of the workable debt solutions in South Africa.

You may mistakenly shy away from voluntary sequestration as one of the debt solutions in South Africa because you fear losing your job, your tools of trade, children’s assets, your mobile phone, ability to rent, pension contributions, and/or personal injury compensation.

Let us take a closer look at the above, helping you to make an informed decision.

In general, furniture does not have sufficient used sale value to realise the funds necessary to pay the creditors. As such, the trustee will normally be willing to have you buy back the furniture from the surrendered estate at an exceptionally low cost. The furniture will be written up, but not removed from your home. This means you will be able to keep the furniture.

Your children’s assets will be excluded from the surrendered estate and, as such, their rooms will be left untouched. The tools of trade, such as equipment needed to do your work, will also be excluded.

The process of voluntary sequestration is discreet, and your employer will not be notified.

Your pension fund, and any money from a personal injury claim, will not be included. In most instances, you can still rent a home, but if asked whether you are sequestrated, you must state the truth. Your vehicles, if still under finance, will be repossessed by the bank. If already paid, the vehicles will form part of the estate. Inheritance money will also form part of the estate.

Costume jewellery does not have sufficient value, but if you do have expensive and valuable jewellery, then the pieces will be included in the voluntary sequestration. You will still have to pay child support and maintenance. Your cellphone contracts, unless behind in payment, should not be affected. However, this is to be discussed with the mobile phone provider.

You will also have at least three months to stay in your home, though this can be up to six months. It will give you enough time to find a suitable abode. All garnishee orders against your salary will be cancelled. Creditors cannot take any further legal steps against you, or demand additional payment or interest.

Once you have been sequestrated, you will be able to start fresh with no debt. This means that you will have sufficient cash to prevent further debt, and can regain financial stability. You can apply for financial rehabilitation as soon as all requirements are met. Keep in mind that money from inheritance, even after the sequestration will be included in the estate.

The process can be completed within a few months. Unlike many other debt solutions in South Africa, you do not make more debt to cover other debt. You get rid of up to 80% of your debt in one go.

If you decide to go this route, speak to our attorneys about voluntary sequestration as one of the debt solutions in South Africa to help you regain financial stability.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Call 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.