HOW CAN SEQUESTRATION ATTORNEYS HELP WITH FINANCIAL REHABILITATION IN PRETORIA?
The economic crisis affects everyone, from small businesses and contract workers to employers and employees alike. Some people are affected more than others. If you are at the receiving end of non-payment by clients and, because of it, end up bankrupt, you have the option of filing for bankruptcy.
WILL IT HELP?
If you have sufficient assets to ensure that the sale thereof as part of the sequestration process can cover the minimum required benefit of 20 cents out of the rand for the creditors and cover the sequestration costs, you can voluntarily sequestrate with the help of our sequestration attorneys in Pretoria. But what if you need help with financial rehabilitation after the sequestration?
DOES IT MATTER WHERE YOU STAY?
Regardless of whether you stay in Pretoria, Cape Town, or any other city or town in South Africa, you can apply for rehabilitation after sequestration. The attorneys handle the court process and since you don’t have to attend the hearing, it doesn’t matter whether you are domiciled in Pretoria or not. In fact, you can get in touch with them electronically.
WHAT ARE THE REQUIREMENTS FOR REHABILITATION?
If you don’t apply for rehabilitation, the sequestration stays in place for 10 years, whereafter you are automatically rehabilitated without having to apply to court with the help of sequestration attorneys. However, a decade is a long time and, during this period, you need the written permission of the trustee to enter into credit agreements. You cannot be a director of a company and cannot hold certain government positions. It also means having to state that you are under sequestration on any form where the question is asked.
WHAT IS THE SOLUTION?
With the help of sequestration attorneys, you can apply for rehabilitation in Pretoria from wherever you are located as soon as the minimum requirements are met. We will discuss these requirements briefly, giving you an indication of the time frame that applies to your particular situation.
WHAT DOES REHABILITATION MEAN?
Rehabilitation is the process whereby the sequestration is brought to an end. Once rehabilitated, you have full control over your financial affairs. Your credit-record status changes from “sequestrated” to “rehabilitated”. You can, once again, be a director of a company and you should be able to open a cheque account. In addition, you can hold government and other positions not allowed while you were sequestrated. No new claims can be brought against the insolvent estate. Your estate is now solvent and recognised as such by creditors and SARS.
TIME FRAME AND REQUIREMENTS
Rehabilitation with the help of sequestration attorneys is possible in the instances as discussed below.
OFFER OF COMPOSITION
If you are able to pay at least 50 cents in the rand for every creditor claim against the insolvent estate, the sequestration attorneys can seek an order for rehabilitation. The Master issues a certificate if the creditors accept the composition. You must be able to give security for payment of the minimum of 50 cents in the rand for each of the claims against your insolvent estate.
TIME LAPSE
You can apply to be rehabilitated if 12 months have passed from the date that the Master confirmed the first account of your estate. This means that you don’t have to wait four years before you can apply for rehabilitation. You can thus regain full financial control over your estate without debt within a short time frame. Note that the option is only valid if you have not been sequestrated before and/or been convicted of a fraudulent act regarding your insolvent estate or a previous insolvent estate. If you have been convicted of such an act, you can apply for rehabilitation after five years have elapsed from the date of confirmation of the first account. If you have been previously sequestrated but not convicted of a fraudulent act regarding that or the current insolvent estate, you can apply for rehabilitation after three years have elapsed from the confirmation date of the first account.
NO PROVEN CLAIMS
You can apply for rehabilitation as early as six months from the date of the sequestration if there have not been any proven claims against your estate. Note that this is subject to no claims lodged against your insolvent estate at the date that you apply for rehabilitation, that you have not been sequestrated before, and that you have not been convicted of a fraudulent act regarding the sequestration or insolvent estate.
REHABILITATION WITH FULL PAYMENT
If you are able to pay the proven claims against your estate in full, in addition to the interest, you can apply for rehabilitation immediately after confirmation of the distribution plan by the Master. Note that you must be able to pay the costs of the sequestration as well.
DO YOU HAVE A RIGHT TO REHABILITATION?
No. It is not a right and the court thus decides whether or not to grant rehabilitation. As such, it is essential to provide your full cooperation with the appointed trustee, as this person must also give permission for you to apply for rehabilitation. You thus need to attend the meeting with the creditors and must work with the trustee to ensure the accuracy and fair distribution of benefits by providing the information needed by the trustee.
DO YOU HAVE TO REPAY ALL THE DEBTS BEFORE YOU CAN BE REHABILITATED?
Fortunately not. The debts form part of the insolvent estate and the trustee has the responsibility of ensuring the fair distribution of the benefits among the creditors. You get a new tax number and thus a new estate. If the requirements for rehabilitation have been met, you can apply to be rehabilitated. This is best done with the help of experienced insolvency attorneys.
HOW TO REHABILITATE WITH THE HELP OF SEQUESTRATION ATTORNEYS
The first step is to publish the notice of your intention to rehabilitate. The notice is published in the Government Gazette. In addition, a notice of the intention must be submitted to the estate trustee and the Master. In order for the rehabilitation application to be successful, the trustee and the Master must approve it. You must also provide security for the payment of costs related to the rehabilitation, such as costs for opposing the rehabilitation, should you be ordered to pay for it. The sequestration attorneys then launch the substantive application for rehabilitation with the High Court. If approved, the sequestration is brought to an end and you are rehabilitated.
WHAT IS THE EFFECT?
Your credit records reflect a status of “rehabilitated” and this stays in place for a period of five years, whereafter it is automatically removed. You are no longer invested in your old estate.
WHY DO YOU NEED THE HELP OF SEQUESTRATION ATTORNEYS FOR REHABILITATION?
The application is a legal process that includes court proceedings. As such, you need legal guidance and presentation. It is imperative to work with attorneys that are familiar with insolvency law and the procedures to follow to ensure a successful application.
WHERE TO GET HELP
Considering the current economic crisis, should you voluntarily sequestrate, it is possible to rehabilitate shortly after if the requirements are met.
Seek legal guidance and help with rehabilitation from experienced insolvency attorneys in Pretoria. There is hope after bankruptcy.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Call on our attorneys rather than relying on the information herein to make any decisions. The information is relevant to the date of publishing: April 2020.