Being sequestrated can be frustrating in terms of opening a business, entering credit agreements, or accepting your inheritance. Read on to find out what to do and what you need to know regarding rehabilitation after sequestration.
SEQUESTRATION REHABILITATION – YOU MUST APPLY TO COURT
Unless you do not mind being sequestrated for ten years, you need to apply to court to become rehabilitated as soon as the time requirements are met. If you do not, then you will have diminished financial and legal capacity for a decade. This is a long time in which you cannot operate as a director of a company, hold certain government positions, or act as a general trader. Use our free rehabilitation assessment form to determine if you qualify.
WHEN DO YOU QUALIFY FOR SEQUESTRATION REHABILITATION? WHAT YOU NEED TO KNOW
Specific time frames apply for each requirement. It is best to consult with our attorneys to determine if you meet the requirements for the particular situation. Below are the instances when you qualify.
PROVEN CLAIMS – WHAT YOU NEED TO KNOW ABOUT THE EARLIEST DATE TO APPLY FOR REHABILITATION
The creditors must prove their claims against your sequestrated estate. Once done, and a period of 12 months has passed, you can apply to be rehabilitated. The Master of the High Court must first confirm the liquidation and distribution account, which the curator must submit. Before you jump for joy, note that this is conditional to the passing of four years from the date of the official sequestration.
As a rule of thumb, work on the four-year period, as this is the general time frame for sequestration. Earlier rehabilitation is only possible under special circumstances, such as it being in the best interest of the public or when you want to start a company and fill the position of director. Reach out to our insolvency attorneys for more information to determine if you meet the requirements.
PREVIOUS SEQUESTRATION – WHAT YOU NEED TO KNOW
If you have been sequestrated before, you will not qualify for an earlier rehabilitation. In this instance, you can apply to be rehabilitated four years after the official date of sequestration, provided three years have passed after the curator has submitted the first liquidation and distribution account, confirmed by the master.
COMMITTED A CRIME – HOW LONG YOU CAN EXPECT TO WAIT?
If you committed fraud or a related crime regarding your insolvent estate, you can only apply to be rehabilitated after five years from the date of the judgment on the matter. An example is when you apply for credit and enter the agreement while hiding the fact that you have been sequestrated.
WHEN NO CLAIMS HAVE BEEN PROVEN AGAINST YOUR INSOLVENT ESTATE
If your insolvent estate is very small, chances are that creditors may refrain from proving their claims against the estate. This is so because they might have to pay a contribution to cover the administrative costs. If the debts you owe are too small to justify their contributions, they may decide to forfeit on their claims. Should no claims be made against your insolvent estate, you can apply to be rehabilitated after a period of six months after the sequestration.
YOU CAN PAY THE FULL CLAIMS – WHAT YOU NEED TO KNOW
If you have the funds to pay the claims against your estate in full, instead of only the minimum benefits required of 20 cents out of the rand, you can apply for rehabilitation. However, you must also be able to pay the sequestration costs, with the inclusion of administrative and legal fees. Only once the curator has submitted the final liquidation and distribution account, and the master has confirmed it, can you qualify.
WHAT YOU NEED TO KNOW ABOUT THE LEGAL IMPLICATIONS
Once you are rehabilitated, you regain full legal capacity. This means you can enter credit agreements without written consent from the curator, can become a director of a company, and hold certain government positions. No further claims can be brought against your estate. You are no longer sequestrated.
TAKE THE FIRST STEP
Collaborate with our insolvency lawyers to guide you through the process of sequestration rehabilitation from start to finish. Our attorneys will advise on what you need to know. Reach out for legal help today.
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.