We briefly discuss how voluntary sequestration works in terms of various assets, helping you to make an informed decision regarding your financial future.

How does voluntary sequestration work in terms of immovable property?

Immovable property is included in the surrendered estate. It is valued and sold on auction by a court-appointed curator. You will have sufficient time to find a new abode. Keep in mind that, should you fail to move out of the house at the appointed time, it can affect your application for rehabilitation. The proceeds of the sale will be used to pay the creditors the minimum benefit as required by law. The shortfall on the debt not covered by such proceeds will be written off. If you have immovable property, you will not have to make cash contribution of at least 20 cents out of the rand.


Movable property includes all the assets that are not classified as immovable property. Movable property still under finance is returned to the bank and is excluded from the voluntary sequestration process. Your household furniture is moveable property and forms part your surrendered estate. However, in most instances, the furniture is not sold on auction. Bedding and clothing also fall within this category.

Furniture is normally valued as used furniture prices and as such, is not really worth the effort to sell at auction. In many instances, the auction costs exceed the value of the furniture. As such, the insolvency lawyers negotiate buyback of the furniture at the low auction values. The furniture is written up as part of the insolvent estate, but is not removed from your house. You then buy the furniture back through a payment agreement with the curator. Valuable paintings and antique furniture may fetch good prices and as such, are normally sold at auction at the curator’s discretion. Furniture still under instalment agreement is returned to the creditor, unless an arrangement is made to settle the outstanding balance and to buy back the furniture from your surrendered estate.

How does voluntary sequestration work in terms of your vehicle? A vehicle still under instalment agreement will be returned to the financer. The financer remains the owner of the vehicle.  The instalment agreement is no longer valid and, unless you can reach another arrangement with the bank, the vehicle will be repossessed. Vehicles paid in full form part of the insolvent estate and are sold at auction. If you have a cellphone contract, it will be suspended and the cellphone will be returned to the creditor unless you are able to pay the outstanding balance. The cellphone will then form part of the insolvent estate. If it is a pay-as-you-go phone, it will form part of the insolvent estate.


If you accept the inheritance, it forms part of your insolvent estate. This is relevant any time during the period in which you are insolvent. The only way to have it excluded is to refuse to accept it. In this instance, you will not inherit anything. You may wish to do so if you, for instance, inherit your parent’s farm or house and rather want it to go to one of the other siblings or beneficiaries than risk the property being sold to someone not part of the family.

What about income?

If you have performed work after the sequestration and are paid for it, the income is yours. This is relevant whether you are a salary worker, contract employee or sole proprietor. There are instances where part of the income can be attached, best discussed with our insolvency attorneys.

What about compensation for injuries?

If you receive compensation for personal injury, defamation, disease, or occupational injury, you do not have to be concerned. Such compensation is excluded from the voluntary sequestration process. The same applies to unemployment insurance benefits.

How does voluntary sequestration work in terms of assets attached by the Sheriff?

If a Sheriff already served a Warrant of Execution on a particular asset, the sequestration order will suspend the attachment and the asset will form part of the insolvent estate.

The above is not a comprehensive list of assets and how voluntary sequestration affects such assets. We recommend speaking to our attorneys regarding assets such as pension fund, tools of trade, jewellery, and more.

Note: 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 publishing – April 2018.