LEARN HOW TO APPLY FOR INSOLVENCY IN SOUTH AFRICA
Congratulations! If you have come to this page, you have already taken the first step towards managing your debt and becoming completely debt free. You most probably want to know how to apply for insolvency in South Africa, and as such, we briefly explain the initial steps below.
According to the Insolvency Act of South Africa, you are entitled to apply for insolvency in South Africa if your debt is more than what you can pay, your liabilities exceed your assets, and you have sufficient income/security or assets to ensure that the sale thereof on auction can realise the minimum benefit of 20 cents out of the rand for the creditors. The assets must also be enough to ensure that the legal costs and administrative costs associated with the sequestration can be covered. If you think you meet the requirements, read on to learn how to apply for insolvency in South Africa.
MAKE AN APPOINTMENT WITH OUR ATTORNEYS OR USE THE ONLINE CONTACT FORM
Make a list of your assets and the value thereof. Also, make a list of your liabilities and the totals. List your monthly income and expenses. List all the creditors and the amounts outstanding. List the unsecured debt (debt without security) and the secured debt. Armed with the information, call on our attorneys to help you determine if you qualify, and to explain the legal process related to how to apply for insolvency in South Africa.
DRAFTING OF A DEBT PROFILE
After our attorneys have explained the advantages, risks, and disadvantages of the voluntary sequestration process, in addition to costs, length of the process, duration of sequestration, and the rehabilitation process, you can decide whether to proceed with your application for insolvency in South Africa. The attorneys will draft a debt profile to help determine the minimum asset value in your estate to ensure that the costs can be paid. The attorneys will also determine what the minimum instalments will be over a period of 24 months, and provide you with the full assessment.
ASSET RESTRUCTURING
If the asset value of your estate is insufficient for voluntary sequestration, our attorneys will advise you on restructuring of the assets and legal means to increase the value of the estate. They will furthermore discuss how you can repurchase assets, such as furniture, from the surrendered estate.
INITIAL STEPS BEFORE THE APPLICATION
Once the “how to” part has been explained, and you qualify for insolvency, the attorneys will commence with application for insolvency. The first step is the drafting of your statement of affairs. This entails a detailed list of your assets and liabilities according to the requirements of the law. Our attorneys will need the names of all the creditors, complete postal addresses, principle amounts owed, and outstanding amounts. Reason for each debt, such as lease agreement, products or services rendered, etc. will be listed. They will also confirm which creditors have security for the particular debts.
DRAFTING OF THE FOUNDING AFFIDAVIT
If you are here because you want to know how to apply for insolvency in South Africa, you most probably also wonder what the founding affidavit is. It is the document that states the reason for your insolvency, debt status, why you apply for sequestration, your CV, the list of creditors, and your monthly expenditure. We will draft the document, which you will sign in front of a Commissioner of Oaths.
PROVISIONAL STATEMENT OF AFFAIRS
We will then provide you with the provisional statement of affairs, and discuss any issues, such as inaccuracies. Once done, the document is signed, and we proceed to the next step.
FORMAL VALUATION OF THE ESTATE
A formal appraisal of your estate takes place by a sworn appraiser. The purpose is to validate the information as stated in the Statement of Affairs. We will then make the necessary changes in your Statement of Affairs and the Founding Affidavit for your signature. Copies are made, and the original and duplicates must be signed (signature must be given in front of a Commissioner of Oaths).
APPLICATION COMMENCES
The above process is what happens before the provisional application is submitted. We will handle the entire application process to Court, notify your creditors, and guide you through the process. Now that you know what to expect regarding the initial process, let us help you to apply for insolvency in South Africa.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Call on 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.