Sequestration Services  /  Sekwestrasie Dienste   -  National

1.Question: Can I sequestrate without a property?

 

♦Yes indeed. There must be a “benefit” for creditor before the court will grant a sequestration order.

♦ If you do not have fixed property, you must have sufficient funds to pay at least 22c in the rand towards your creditors for at least 18 months.

♦The total minimum amount that must be available to creditors is R 36 000.

♦R36 000 over 18 months will cost R2000 per month

 

2.Question: Why don’t I simply wait for my creditors to sequestrate me?

♦Creditors are not keen to bring a “hostile” Sequestration Application, because it is normally cheaper for them to follow execution steps via the Sheriff.

♦Hostile sequestration applications are normally brought against debtors who have very large estates and have hidden their assets from creditors.

♦Such a creditor would most properly hold an insolvency enquiry against such a debtor.

 

3.Question: Can my creditors take my salary?

♦Once you are sequestrated no creditor is allowed to attach your salary, either by Garnishee Order against your salary.

4.Question:  Will I lose my furniture?

♦No. Your attorney will negotiate on your behalf for the household furniture to be excluded from the Insolvent Estate.

♦In the worst case scenario your furniture is appraised, and you have to buy back your furniture from your Insolvent Estate, while the furniture stays in your            possession.

♦The “insolvency value” of furniture is very low, because it is valuated at a forced sale value, such as when it is sold in execution by a sheriff.

5.Question: Can my creditors take my pension?

♦No. Section 23(7) of the Insolvency Act prohibits the attachment of your pension, an annuity funds or any other funds that fell under the Pensions Act.

 6.Question: How long will I be able to stay on in my house which falls into my insolvent estate?

♦From the day that you have completed all the necessary documentation and paid the required fee, you will normally stay on in your house for a period of at least four and months.

♦The reason for this is because it takes about seven weeks to get the sequestration order.

♦There after a trustee must be appointed by the Master of the HighCourt.

♦Under normal circumstances this takes about two weeks. Once the trustee is appointed, the two creditors meetings must be held.

♦This takes another two months.

♦The trustee can legally not deal with the property before the second meeting of the creditors has been convened.

♦If you then add up these periods, it is about four and a half to five months.

7.Question: How long will I be able to keep my car?

♦Once the attorney have placed an advertisement in the Government Gazette in which you give notice that you intend to sequestrate, all execution steps against you stop.

♦Once you have been sequestrated and the trustee has been appointed, the creditors would normally want their assets back immediately.

♦The short answer is that you will keep your car until shortly after sequestration.

8.Question: What is the effect of my sequestration on a lease agreement?

♦Should you have leased premises at the time of your sequestration, the lease agreement is not automatically cancelled by your sequestration.

♦ In practical terms should you lease a residential property, you simply keep on paying your rent and you stay on in the property.

9.Question: Will I be able to open a bank account after my sequestration?

♦Yes indeed. Banks won’t allow you to open a current account or a credit card account,but they will certainly allow you to open a savings account.

♦In practice this is no problem because virtually all savings accounts are these days linked to a banking card which can be swiped anywhere in the world.

♦If you have internet facilities and the facility to swipe your card, this poses no problem.

10.Question: Should I keep on paying my creditors after I have given my Attorneys Instruction to sequestrate me?

♦No. Should you keep on paying certain creditors, you will prefer them above other creditors. Under South African Law this is not allowed.

11.Question: Will I be able to rent a house?

♦There are thousands upon thousands of people who are sequestrated. All of them live somewhere.

♦In our experience, it is not difficult to find landlords / rental agents who are willing to let property to an Insolvent client.

12.Question: Am I allowed to enter into a contract after sequestration?

♦The general rule is that you are allowed to enter into any contract which does not pertain to assets which fall into your Insolvent Estate.

♦You are for example allowed to enter into a cell phone contract, rental agreement, ante nuptial contract etc.

♦You are even allowed to enter into credit agreement if you have disclosed that you are insolvent and

  the creditor is willing to grant you credit. The discretion in granting you credit is with the creditor.

13.Question: Can I sequestrate whilst / after I have been placed under debt review?

♦Yes indeed. The only requirement is that the debt review order must be set aside before the High Court can grant a sequestration order. 

14.Question: Will I have to pay back my creditors, if I have a fix property, before I can apply for rehabilitation?

♦When you are sequestrated, in layman’s terms your debt is written off.

 

15.Question: Can creditors take my assets while I am in the process of sequestration?

♦The process known as “surrender of estate” is the process where you approach the Court personally and ask the Court to help you.

♦The Insolvency Act prescribes that your intention to sequestrate must be publicized by way of registered post to your creditors as well as by publications in certain media, inter alia in the Government Gazette.

♦Once the publication of your intention to sequestrate has appeared in the Government Gazette, no Creditor is allowed to sell any of your assets

 

16.Question: What is the role of the Trustee in my life after sequestration?

♦The Trustee is not interested to be involved in your life. He has a job to do and that job is to realise the assets which fall in your insolvent estate, where after a dividend is
distributed amongst creditors.

♦Before the dividend can be distributed amongst creditors the Master of the High Court must approve the distribution.

17.Question: My relationship with the Trustee?

♦It is strongly advisable that you give your trustee your full co-operation.

♦The trustee is in a position of trust regarding his relationship to the Master of the High Court and he isfurthermore in a fiduciary position regarding the creditors.

♦If you give your full co-operation to the trustee there is no reason whatsoever for the trustee to become your adversary.