What Happens Should You Own A Property:
Regrettably, you will forfeit your immovable property. However, it can take several months before you will be given ample notice to vacate your house.
Advantages:
You will be absolved of all debts.
- Counsel shall represent you in the High Court, eliminating the need for your presence in court.
- Your income is exempt from creditor attachment and any salary deductions ordered by garnishee will be lifted upon approval of the sequestration order (Court Order).
Disadvantages:
Throughout your sequestration period, credit and loan applications will be unattainable. Your credit profile will display the word “Sequestration”, until you have been rehabilitated. Your eligibility to act as a director of a Company or as a member of a Close Corporation shall be barred.
The Legal Process:
- An application will be made by your legal representative in the High Court and supported by way of affidavits. You therefore not need to attend court.
- Once your application is granted, a trustee shall be designated to manage your estate, overseeing negotiations with your creditors and the general administration of your estate.
What If Your Application Is Dismissed:
The judge had reservations regarding the application and declined to grant the order until all requirements were satisfied. Consequently, in such an instance, your legal representative shall make the necessary modifications, and the application shall be re-advertised. Despite the delay in your application, the Attorney shall keep advertising until the application is indeed granted. It’s important to note that an application is not cancelled if in the unlikely event the first application is not granted; instead, the legal process continues until the order is, in fact, granted.
Information About The Curator:
The curator shall be appointed by the Master of the High Court to take charge of your insolvent estate. Henceforth, the curator shall be responsible for managing and concluding the administration of your estate. Subsequently, creditors may no longer contact the debtor directly, and all communication ought to be directed towards the curator.
The South African Revenue Services (SARS):
The South African Revenue Services shall be duly informed regarding your sequestration and subsequently you will need to apply for a new tax number. SARS will also liaise directly with your curator.
Inheritance After Sequestration:
This forms part of your estate of which you must be weary off. You must bring this possibility under your attorney’s attention for further legal advise.
Your Pension Fund:
Your pension fund is entirely safe. Any policies or funds regulated and governed by the Pension Act are safeguarded by the Insolvency Act. By law, the curator is strictly prohibited from handling your pension fund.
Cell Phones And Other Rental Contracts:
Your lease agreements will remain in effect despite the sequestration process, provided that you continue to uphold your payments and meet the terms of the lease. However, if you choose to include these contracts as part of your estate, the lease agreements will be terminated.
Child Maintenance:
It’s important to note that the sequestration order does not absolve you of your child maintenance obligations. Child maintenance payments must continue to be made in accordance with the court order. Arrears child maintenance can be included as one of your debts. If you encounter difficulties or are unable to meet these obligations, you must request the maintenance court to consider reducing the payment amount.
School Fees:
It’s imperative to note that any outstanding school fee payments before the sequestration order will be included as part of your estate debts. However, after the order is granted, all further school fees will be payable as normal.
Parking Ticket, Speeding Fines And License:
These items are exempt from your sequestration process. Therefore, you are still required to meet these financial obligations and make the necessary payments.
The Effect on Your Employment:
The sequestration order should not, under any circumstances, impact your employment status since it’s prohibited by law to discriminate against employees on this basis. However, certain positions, such as being a director in a company or an actuary and other FSB regulated services might be affected by the sequestration order.
Marital Status:
• IN COMMUNITY OF PROPERTY:
You and your spouse have a joint estate, which means that your spouse will also be a party to the sequestration procedure.
• OUT OF COMMUNITY OF PROPERTY
You and your spouse have separate estates, and your spouse’s sequestration is not required.
• IF YOU ARE UNDER DEBT REVIEW
If you are currently under debt review or administration, your sequestration order will terminate these applications automatically and you will not make any further payments towards these procedures, calculated from the day you elect to follow the sequestration process.