WHEN AND WHY TO VOLUNTARY SEQUESTRATE IN SOUTH AFRICA
Before you even consider surrendering of your estate, speak to sequestration experts in South Africa regarding the process, risks involved, potential pitfalls, advantages, and rehabilitation. To get you started, we share the basic information, but for more in-depth information, we recommend speaking to our team of sequestration experts in South Africa.
What It Entails
Voluntary sequestration is a legal process whereby you apply to court to have your estate surrendered. If your application is successful, the court will declare you bankrupt and thus insolvent, according to the regulations of the Insolvency Act.
When to Apply
As our sequestration experts in South Africa will explain, it is an expensive process, recommended if you have a large amount of debt, have assets to surrender, and want to become totally debt-free. You may consider it if you have lost a lot of money as the result of an investment decision and experience tremendous financial stress. You may also want to consider it when your liabilities far exceed your assets and income, and you find it difficult to pay creditors. If creditors are threatening with legal action against you, there is no time to waste.
It is also an option if the bank has foreclosed on your property, leaving you with a shortfall you are unable to pay. This can also be the case if your vehicles have been repossessed, but you still have a large outstanding amount to pay. Likewise, if you are under debt review, but will remain so for years to come unless you sequestrate, you will want to speak to our sequestration experts in South Africa.
How Voluntary Sequestration Will Benefit You
There is no benefit in losing assets, but if you are unable to pay creditors, you may want to consider surrendering of your estate. Once the sequestration process is completed, you will be without debt and can start rebuilding your life. You can apply for financial rehabilitation as soon as the requirements are met.
You will be debt-free and no claims against the surrendered estate can be brought against you. Garnishee orders cannot be attached to your salary and, in most instances (unless you sequestrate without immovable property), you will not lose your movable assets. If your vehicle instalments are up to date, it is possible to negotiate with the bank to have you drive the vehicle while paying it off. If the vehicle is paid off, it will form part of the surrendered estate, but it can be arranged that you buy it back from the insolvent estate.
Speak to our sequestration experts in South Africa about the process and the costs involved in becoming debt-free through voluntary surrendering of your estate.
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.