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Debt Relief-Sequestration Process

The process of Sequestration

If you are an individual and want to declare yourself insolvent, you need to file for sequestration.

Sequestration is the legal process in South Africa, whereby an individual can declare themselves bankrupt/ insolvent.

In simple terms, if an individual’s debt has become too great, impossible to manage, and the person’s liabilities exceed his/her assets, the individual is insolvent (bankrupt).

This results in a person feeling demotivated and, in some instances, unable to get on with their life.

Why declare yourself insolvent?

If you cannot pay your debts in your capacity as an individual, one or more of your credit providers can apply to have your estate sequestrated.

Alternatively, you can apply for voluntary sequestration.

In instances where you have a large amount of debt, which is going to take more than 10 years (excluding your home loan) to pay back.

Then sequestration is probably a better option than debt review or debt management.

We will give you back your life and give you an entirely fresh start.

In appropriate cases the insolvent can “get rid of the debts.” That is, write off the debt and regain a normal life debt-free.

This is done by way of a procedure referred to as an application to the High Court for the Sequestration of the insolvent’s estate.

Upon sequestration, a Trustee is appointed by the Master of the High Court, who then takes control of the insolvent’s estate.

Creditors are then no longer able to pursue the insolvent directly.

The ultimate Debt Relief for over-indebted consumers in South Africa remains Sequestration, followed by Rehabilitation in terms of the Insolvency Act. Sequestration is a legal process whereby a Trustee, appointed by the Master of the High Court, collects a contribution and this is used to pay your creditors.

The main benefit of this procedure is that you may subsequently be rehabilitated, which will grant you a discharge of unpaid pre-sequestration debt.

Benefits of Voluntary Sequestration as an Individual

Your salary and other income will be your own, as you will no longer make monthly payments to creditors as required under debt counseling.

You will not lose everything you own.

Once we start with the Sequestration process, you will stop making payments to all known creditors, as Insolvency legislation prescribes that you may not prefer one creditor to another creditor prior to Sequestration.

Your creditors are notified of the Sequestration. However you (in general) need not give notice to anyone else of this fact, not even your employer.

You will no longer be liable to your creditors for all your outstanding debts, keeping in mind though that you need to prove that the Sequestration will be to the advantage of creditors.

Once the notice of voluntary Surrender is advertised in the Government Gazette and local newspaper, all execution sales against you will be stopped which means your creditors may no longer sell your assets in execution.

Disadvantages of Voluntary Sequestration

These are minimal when compared with the advantages.

But you need to know that your credit worthiness will be affected – that is, you will not be able to obtain credit/loans etc. from financial institutions, until you have been rehabilitated.

You cannot be a director in a company until you have been rehabilitated.

You and your family can make a fresh financial start – FREEDOM – you and your family can start afresh, a new beginning – without debt. You do not have to be afraid of “Unknown Numbers” on your mobile phone! Ursula Gouws

Sequestration Visionary, Ursula Gouws Consulting

Sequestration Rehabilitation

We can attend to your Sequestration Rehabilitation if you have been under Sequestration for at least 4 (four) years.

Consulting Process
Step 1 – Make an appointment with us.

Step 2 – During consultation, whether it is in person or telephonically, we will assist you in determining whether sequestration is indeed the right option for you.

Step 3 – An advocate will determine your contribution based on your current debt – It is of utmost importance that you provide us an accurate summary of your debt as we do not want red faces and a difficult situation after the sequestration.

Step 4 – Should you want to proceed with sequestration, there are a lot of legal formalities of which we take care.

Step 5 – Then all you need to do is keep to the payment arrangement while you start your new debt free life

Legal Process
Step 1 – As soon as the first payment is received, the instruction to proceed with the Sequestration Order is granted.

Step 2 – An advert of intention will be published in the Government Gazette, and all legal action a against you will be suspended with immediate effect.

Step 3 – Court documents will be drafted for you and this should be signed before a commissioner of oaths.

Step 4- A registered letter is sent to your creditors informing them of your intention to surrender your estate.

Step 5 – Our Advocate will represent you in Court on the day of the hearing.

Step 6 – After the Court Order has been granted, a Trustee will be appointed by the Master to handle all the financial claims. affairs of the estate.

This process can take 4 to 6 months and we are with you every step of the way.