Contact us for assistance if you have been under sequestration for the allotted time and need help
Although there are disadvantages such as not being able to apply for credit or not having the ability to be a director of a company during the period, you will no longer have to make monthly payments to creditors. They cannot harass you or take any further legal action against you. Let us have a look at Why consider voluntary sequestration
Contact us for assistance if you have been under sequestration for the allotted time and need help with the rehabilitation process.
Voluntary Sequestration – Advantages and Disadvantages
Voluntary sequestration is a means to get much needed debt relief if you are over-indebted. Many people in South Africa are over-indebted and various means have been made available to help the consumers in getting debt free. Voluntary sequestration is followed by rehabilitation and is done in accordance with the regulations of the South African Insolvency Act.
It is often a traumatic experience, but considering that you may even be completely debt free once the assets have been sold, it can be the quickest way to get out of extreme debt.
Voluntary Sequestration – Advantages and Disadvantages
Voluntary sequestration is a means to get much needed debt relief if you are over-indebted. Many people in South Africa are over-indebted and various means have been made available to help the consumers in getting debt free. Voluntary sequestration is followed by rehabilitation and is done in accordance with the regulations of the South African Insolvency Act.
It is often a traumatic experience, but considering that you may even be completely debt free once the assets have been sold, it can be the quickest way to get out of extreme debt.
Why Consider Voluntary Sequestration?
Once you enter the process, the notice of estate surrender is published in the Government Gazette and a local newspaper where after no further legal proceedings can be initialized by creditors. Your salary and any other income are untouched and you won’t need to make any further monthly payments to the creditors.
Except where there are existing garnishing orders in place, which can only be removed one the sequestration has been approved by the court with a court order.
This will help you to start with a clean slate and by doing so will ensure that you have enough disposable income to rebuild your estate. All payments to creditors are stopped as soon as the sequestration process is initialized, to prevent one creditor from being favored above another.
According to the Insolvency Act creditors must get 20-25 cents out of each Rand. The creditors also receive notification of the sequestration and will thus not harass you any further. Privacy is respected and you don’t have to tell your employer.
It’s important to note that you need to give evidence that the sequestration will favour the creditors and for such we are here to help. You will also have an Advocate to present your application in the Court and as such you will not have to attend any court proceedings.
A curator is appointed to manage the distribution of the financial benefit to the creditors. We can also arrange with the vehicle financer to keep the vehicle if installments are up to date. The process will be explained during your consultation. You can apply for rehabilitation within four years depending on the specific case.
Disadvantages to Consider
We want you to make an informed decision regarding voluntary sequestration and also discuss the disadvantages. The most prominent disadvantage is the effect it will have on your credit standing. Until you have been rehabilitated you will not be able to take out any type of loans or obtain credit.
This can make it difficult if you need to finance your child’s college studies or want to buy a car. You may also not be a director of a company unless you have been rehabilitated. If you are an entrepreneur this can seriously affect your means to an income.
Rehabilitation
Once you have been declared insolvent you will need to undergo rehabilitation in order to regain your solvent status and thus allow you to rebuild your credit record.
In order to rehabilitate you would have to have had concluded your financial responsibility under the sequestration process.
The process can take up to four or more years after which you can obtain permission from your appointed curator to apply for rehabilitation.
This is a process whereby you will no longer be limited in terms of directorship or financial loans.
Once rehabilitated the sequestrated status on your credit record will be removed by the Credit Bureau.
Debt counselling and Insolvency 