Bankruptcy Process

Step 1 – Submit information and circumstance.

We do not charge client’s for assessments. We will request a list of outstanding debt and obtain a copy of the Credit Report to verify the outstanding debt. An assessment will be conducted to determine if a client qualifies. We will also explain, in detail, how the process works and what a client can expect to pay. On average 75% of a client’s debt is written off and the remaining 25% can be paid in cash, in full, or over 18 months. Another way of putting this is that for every R100,000 a client owes, R75,000 is written off. The R25,000 remaining can be paid in full or over 18 months at an instalment of R1,388 per month. Some debt can be written off 100% and so it is important to have a detailed assessment conducted by us to determine what it you actually owe. This assessment is free of charge and gives you the opportunity to make an informed decision with regards your financial health.

 

Step 2 – Provisional statement of affairs.

The Bankruptcy Attorney will draft the Provisional Statement of affairs and discuss issues regarding it. Once the issues have been addressed, the Attorney will draft the final statement of affairs. A statement of debtor’s affairs, listing all the client’s debts, must be signed before a Commissioner of Oaths.

 

Step 3 – Reserving a date on the court roll for the Bankruptcy Order.

The Bankruptcy Attorney will submit the notice of motion, which reserves a date and time on the court roll for the hearing.

 

Step 4 – Notification to Credit Providers.

SARS, the Master of the Court and the Credit Providers must be notified of the client’s intention to apply for Bankruptcy. To this end, the Attorneys draft the notice that is published in the Government Gazette and a local newspaper. The Attorneys also submit the information to the Master of the Court and send a notification to the Credit Providers and SARS via registered mail. Once the notice has been published, all payments to Credit Providers must stop. This is to prevent a situation whereby one Credit Provider receives more money than others. All legal actions against the client are stayed, garnishee orders cancelled and interest on debt frozen.

 

Step 5 – Prepare and submit the final statement of affairs.

A statement of affairs must be drafted and submitted to the Master of the Court.

The statement includes:

1. The client’s income and expenses

2. A list of the Credit Providers, their contact information, the outstanding balance, interest, and monthly instalments.

3. An affidavit by the client, called a founding statement, will confirm the truthfulness of the information supplied and is signed by a Commissioner of Oaths. The client must be in the presence of the Commissioner of Oaths when this affidavit is certified.

The statement of affairs is submitted to the Master of the Court where it is available for inspection by Credit Providers. Note that correct procedures must be followed in terms of submission and notification. For one, the Credit Providers must be notified of where they can inspect the statement of affairs.

 

Step 6 – Court hearing and Trustee appointment.

An advocate is appointed to present the client’s case to the court and the client is notified of the outcome. If the Bankruptcy is awarded, a Trustee is appointed to oversee the distribution of the benefits to the Credit Providers.

 

Step 7 – Meeting with the Trustee and conclusion of the Bankruptcy Order.

The Trustee and Credit Providers will meet regarding their claim and what they will receive. Two meetings will be held. Once these meetings are finalised the Sequestration is concluded and a Liquidation and Distribution account submitted to the Master of the Court for inspection.

 

Step 8 – New Tax Number.

Once the first Trustee meeting is concluded and the first account submitted to the Master of the Court, the client must apply for a new tax number. If a client does not apply for a new tax number all rebates from Tax refunds will go to the previous tax number and to the benefit of the Credit Providers in that estate. If a new tax is obtained, all rebates will be paid to the client’s nominated bank account.

 

Step 9  – Rehabilitation application.

Rehabilitation must be applied for by the client, through an attorney, to remove the Bankruptcy notice from the Credit Report and to restore the Credit Score. This can be done 24 - 48 months after the Bankruptcy Order is granted by the courts or 12 months after the Trustees’ first account is confirmed. If the Consumer chooses not to apply to be Rehabilitated after 24-48 months then they will be automatically be Rehabilitated after 10 years.