The Insolvency Act of 1936 is often misunderstood and misused because it covers so many aspects of debt resolution in South Africa. It can be a complex process, leaving one to feel overwhelmed and confused on how to proceed. Insolvency lawyers are there to help you understand the process and to become debt-free.
Read on to discover the many ways our insolvency lawyers can help you through the voluntary sequestration process, get answers, and avoid pitfalls along the way. Let us look at information about asset protection and loss and how we guide you through the sequestration process. Jump to our FAQ section for answers on specific aspects of sequestration.
WHAT ABOUT YOUR FURNITURE – WILL YOU LOSE IT ALL?
Generally, furniture does not have a high second-hand value, especially not when sold at auction. If you are in deep financial trouble, chances are your furniture’s value will not be enough to cover the debts. If the furniture had enough value, then your liabilities would not have exceeded your assets. This means you would not have been truly insolvent, as is a requirement stipulated by the Insolvency Act if you want to apply for voluntary sequestration.
With the low auction value of the furniture, the curator/trustee is often willing to have the furniture written up, but not removed from your premises. Our insolvency lawyers are there to negotiate the buy-back of the furniture from your estate at the low auction value. You will certainly not end up with just a mattress.
WHAT ABOUT ANTIQUE FURNITURE?
Antique furniture pieces do have significant value. To this end, we recommend discussing the issue with our attorneys. The sale of these types of items may bring in sufficient proceeds to ensure the creditors receive the minimum benefit of 20 cents out of the rand and the legal fees are paid.
WHAT MUST BE COVERED THROUGH THE SALE OF ASSETS AT THE AUCTION?
The voluntary sequestration must provide for enough proceeds to cover the trustee/curator fees, legal costs, and the minimum required benefits as stipulated by the act. If you owe R200 000 to the creditors, the sale must bring in enough money to ensure at least R40 000 can be paid towards them, and that the legal fees and trustee/curator costs are covered.
WHAT HAPPENS IF THERE IS A SHORTFALL?
If after the sale of assets, there is a shortfall, you will have to pay the amount either as a lump sum or by agreement over a period of 18 to 24 months. The good news is that interest on the debt is frozen. You can pay off the amount through affordable instalments. Our lawyers are there to help you determine if the sale of assets will bring in enough proceeds to cover these costs. They will guide you every step of the way.
WHAT IS INCLUDED AND WHAT EXCLUDED FROM THE SURRENDERED ESTATE?
Your children’s assets are not part of the sequestration process. You do not have to worry about their cycles or toys going on sale. Their assets belong to them. Your pension fund money, salary, and income from a personal injury claim are protected. However, any inheritance whether before the sequestration or after, but before rehabilitation, forms part of the process. You can protect the inheritance by not accepting it. Our experienced lawyers are there to assist you with answers on what is included and how to minimise the effect of the sequestration on your family and life. For one, tools of trade are excluded, but knowing what is taken as tools of trade is important. Here too, our attorneys will assist with information.
OUR INSOLVENCY LAWYERS ARE THERE TO HELP YOU WITH THE PROCESS
They will discuss the costs, processes, requirements, and outcomes with you. They will help you draft the statement of affairs and affidavit. The attorneys will provide you with a list of documents needed, help to ensure protection of your spouse’s assets (if married out of community of property), ensure the relevant notices are published, present you in court, and communicate with the creditors. You are in experienced hands. First, read through our articles and information on the sequestration process. If you have more questions, get in touch with our attorneys.
READY TO TAKE THE FIRST STEPS TOWARDS BECOMING DEBT-FREE?
Start the journey to financial freedom. Complete the online assessment form to determine if you qualify. Our insolvency lawyers are there to help you step by step.
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.