The surrendering of your estate during sequestration can be instituted by the Courts to help persons that are no longer in a position to honour their debts due to uncontrollable circumstances.
The Sequestration process enables you to regain normality in your financial affairs – where you can adjust your lifestyle to be in line with the available budget, without creditor headaches. You will experience a normal lifestyle without the fear that creditors will phone you day and night from “private numbers” and therefore you can answer your calls fearlessly, and no more fear that the sheriff may make an unwanted house-call
A short summary of the Sequestration Process in South Africa:
- We publish an advert in the Government Gazette and the Citizen. This will prevent any further legal procedures against you i.e. execution notices, seizure on your movable and/or immovable property, etc.
- An ability statement is drafted that you must sign before a Commissioner of Oaths. This document is submitted for inspection at the Master of the High Court for 14 days or with the local Magistrate.
- Thereafter a registered letter is forwarded to all your creditors as notice of the surrendering of your estate. Your creditors thus contact me for information. You will also be provided with the same notice to enable you to forward to nagging creditors.
- The South African Revenue Services are also notified, even if you are not registered with SARS.
- The day of the Court proceedings an Advocate will represent you; there will be no need to attend any court hearing in person.
- After the application has been approved and granted by the Court, a curator is appointed to handle all financial matters on your behalf. The curator will contact you to arrange a consultation to explain the details to you. If you live outside of Pretoria or Johannesburg a telephonic consultation will suffice.
- The Court Rules determine that you pay between 20c and 22c in a rand benefit to your creditors. In other words if you owe FNB, R1-00, they should get 20c thereof. If your total debt is R50 000-00, you will pay R24 500-00; R100 000-00 you pay R35300-00; R200 000-00 you pay R57 000.00 and so forth (Please note that these are approximate figures). A fixed fee is already included in the amount payable and in doing so you will not be caught off-guard with unexpected attorney or curator costs. The benefit of this approach is that the repayment amount does not accrue interest. Arrangements must be made with the curator to settle the amount with them in installments between 12 to 18 months, written permission is needed from the curator. Therefore, if you owe R50 000 you can repay it in installments of R1361-00 per month for 18 months – there are no further interest or costs thereon.
- To generate the money in terms of the Rules of Court the following is done:
8.1. I will forward you a document, listing general household items. You must identify your assets on the document and describe each item e.g. TV – Sansui 54 cm etc. This document will be forwarded to the values to establish the value of the items. *No furniture will be removed. The purpose thereof, as you do not own immovable property (e.g. a house), is to do movable asset surrender. The purchase agreement, prepared by the curator, will be presented to you in order to assist in purchasing your assets back. Your assets will be evaluated at a market related price, which will be the figure used to purchase your assets back.
As soon as the application has been approved and granted, an order is granted the curator will contact you to confirm the details in respect of your assets.
* Failure to comply with the arrangements made with the curator will result in removal of the furniture.
- The Disadvantages of sequestration:
- You will be insolvent for at least the next 2 to 4 years. There are circumstances where you can apply for rehabilitation after 18 months, keep in mind that this is an exception rather than the rule. For your insolvency period, you will not be credit worthy. You may receive permission from you curator in certain circumstances for example when you need to purchase a vehicle – this permission will not be granted before a window period of four months, and then the financial institution will require someone to stand as security.
- You may not have a cheque account or a credit card facility. You may under no circumstances engage in any debt arrangements.
- The Advantages of sequestration:
* Dependable on your ability to honour arrangements with the curator
1. Your salary and other income is still your own and you do not have to pay any creditor.
2. Only your creditors are notified of the process and not your employer or any other person. You will not be discharged from your work because of it.
3. You will not have to attend Court.
4. Your curator can arrange with your financial institution (the bank) to keep your vehicle and if your installments are up to date, to enter into a lease agreement.
5. It is of utmost importance to provide a 100% accurate list of all your creditors, to prevent unwanted red faces and difficult situations after sequestration.
*Very important: 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.
If one understands Sequestration fully and knows that there’s help at hand, relief will soon follow.