Assessment of the client’s unique situation:
First and foremost, the Insolvency Practitioner must determine if the client is indeed insolvent or if another debt remedy, as provided under the National Credit Act should be investigated further, as a possible solution to the debtor’s financial distress situation.

This is done by completing an application form which provides the Insolvency Practitioner with all the information is necessary to efficiently advise clients accurately.

Decision to apply is reached, what is the next step:
Once the client decides to proceed with the application the attorney will proceed by publishing the applicant’s intention in the Government Gazette, as well as obtaining a suitable court date.

The day the advertisement appears in the media the debtor falls under the protection of the Insolvency Act 24 of 1936 which means that he/she is prohibited from making any further payments to creditors (with the exception of garnishee orders – see FAQ)

The attorney will draft a statement of debtor’s affairs, as well as all the other Court documents in support of the High Court Application. In these documents he, will state amongst other facts, the following:

* List of creditors as well as each creditors’ outstanding amount.

* The benefit to the creditors should the application be granted.

(The norm is that this variates between 20c and 25c in the Rand)

The day of the court case:
As sequestration is a High Court application an Advocate will present your case to the Court on your behalf.  There is no need for you appear in court yourself.

Once your case has been heard the attorney will contact you to inform you of the results whether the application was granted or not.

After the application has been granted:
The attorney will provide you with a court order as soon as the Court typist processed the court Order.

The Master of the High court will appoint a curator who will handle the financial affairs of your Insolvent Estate.

The client will have to provide to the curator (usually through the attorney) the funds needed to pay the benefit to the creditors.  The client may request the attorney to negotiate on his behalf with the curator to pay off the amount due, over a period of 18 to 24 months or provide a full settlement of the amount in one cash payment.  In the event where neither of these options as available or accepted by the curator, an auctioneer will be appointed to auction off the client’s assets to recover the amount due to the creditors.

The curator will (in accordance with the regulations of the Insolvency Act), distribute the benefit to creditors, as set out in the documentation of the sequestration application.

All Creditors’ claims have been settled by the curator:
The curator will provide the insolvent with a document stating that all aspects pertaining to the insolvent estate has been satisfactorily concluded.

This document will give the insolvent permission to apply for rehabilitation.

The entire process may take up to 34 months from date of Sequestration although in some instances it can be concluded in less than 24 months. All aspects depend on your unique personal circumstances.