Sequestration is a voluntary debt solution that can help individuals write off unsecured debt that would otherwise take many years to clear. Our Insolvency Practitioners will contact your Creditors on your behalf, taking away any stress and anxiety caused by creditor contact. Once you are sequestrated, creditors are unable to pursue you or take any legal action against you to recover any debt that is still owed.
What Is Sequestration - Sequestration Meaning?
Sequestration is a legal process you can apply for when you are unable to pay your debts. It can release you from most debts, provide relief and allow you to make a fresh start. You can enter into voluntary sequestration or voluntary surrender. To do this you need to complete and submit a Sequestration Application Form. A Sequestration order normally lasts for 24-48 months.
How does Sequestration Work?
The Sequestration process is a High Court application that declares an individual insolvent. 75% of all unsecured debt incurred up to date of the court order (the Sequestration Order) is written off. A curator is appointed after Sequestration. The curator's job is to wind up the insolvent estate of the debtor that was Sequestrated. Winding up means that the curator must distribute the 25% remaining to all credit providers. This can either be done by paying off the 25% in full using retrenchment/pension/family money or in installments paid off over 18 months.
Am I eligible for Sequestration?
You can apply for Voluntary Sequestration if you meet these requirements:
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you are unable to pay your debts when they are due.
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your debt has been handed over to collection agencies.
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you have shortfalls on assets such as vehicles and a home that has already been repossessed.
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You have tried Debt Review and the installment is still not low enough to assist in managing your monthly living expenses.
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You have judgements and emolument attachments on your income.
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Debt must be more than R150,000.
Types of Debts that can go into a Sequestration application:
INDIVIDUALS
Shortfalls from assets that have been repossessed and auctioned.
Financed Vehicles. Vehicles that are paid up do not form part of the application.
Pay Day Loans
Loans
Overdrafts
Credit Cards
Store Cards
Arrears tax owing to the South African Revenue Services (SARS)
Cell phone Contracts
Medical Debt
Arrears School Fees
Other third-party Contracts
Here is some more information?
The sequestration process involves a Court Application. The Applicant will be either yourself, in the event of Voluntary Surrender, or one of your Creditors (either a friendly or aggressive Creditor).
Perhaps the most significant benefit to be gained from Sequestration is that it enables an individual to draw a line under their unsecured debt problems and start moving forward. A fresh financial start.
While the advantages of Sequestration are significant, their are some disadvantages. The one that has the most impact is the fact that an individual cannot apply for credit until credit rehabilitation occurs.