We, at Rorqual Consultants, prioritize personal growth and financial wellbeing.

Our consultancy specializes in debt reduction strategies and provides guidance on ​confronting unwanted debt proactively. Recognizing the significance of ​understanding the psychology behind financial security, we emphasize clarifying your ​financial objectives to maintain motivation and progress.

We will reflect on your financial relationship and devise a plan towards achieving ​stability. Financial freedom denotes having full control over your finances, ​empowering you to make decisions aligned with your aspirations, rather than being ​constrained by expenses. This enables you to lead life on your own terms.

Break free ​from debt​ today!

Understanding Sequestration in South Africa

Sequestration, governed by the Insolvency Act of 1936, is a legal recourse in South Africa for individuals overwhelmed by ​debt. This process allows individuals to declare bankruptcy when their debts surpass their assets, offering a means to ​manage financial difficulties. Here's a concise overview:

Sequestration is the legal process whereby individuals surrender their assets to creditors due to insolvency, where debts ​exceed assets.Individuals can seek sequestration when facing insurmountable debt, asset repossession, or inability to meet ​monthly payments.

The Process :

1. Drafting an Ability statement listing creditors and reasons for sequestration.

2. Signing the Ability statement before a Commissioner of Oath.

3. Advertising the court date in the government gazette to inform creditors.

4. Submitting the Ability statement to the Master of the High Court.

5. Issuance of a provisional sequestration order by the Master of the High Court.

6. Appointment of a Trustee to oversee the process.

7. Informing creditors and managing claims by the Trustee.

8. Issuance of a sequestration order by the High Court, safeguarding individuals from further creditor claims.

In cases of vehicle payment default, voluntary surrendering of the vehicle can prevent legal actions and additional costs.For ​individuals in South Africa facing financial distress, understanding the process of sequestration can provide a path towards ​debt relief and financial stability.

Benefits of Sequestration

1. Get rid of all your debt and start over
2. You do not have to appear in court at all
3. You no longer have to communicate with your creditors
4. Your salary is safe and all garnishing orders are stopped
5. Once the application is granted action taken by creditors is stopped. Creditors are not allowed to attach your movable ​property.
   

Understanding Liquidation and Director Responsibilities in South Africa

Liquidation, in the context of South African business law, refers to the formal process of closing down a ​company, typically due to insolvency, where the company's liabilities exceed its assets.

When Should South African Directors Consider Liquidation?

Directors of companies in South Africa should consider initiating liquidation under the following ​circumstances:

1. Insolvency: When the company's debts surpass its assets, rendering it insolvent. It's crucial to understand ​that continuing to trade while insolvent can hold directors personally liable for incurred debts.
   
2. Liquidity Issues: When the company faces challenges in paying trade creditors, with no foreseeable ​improvement in the near future.
   
3. Cessation of Trading: When the company ceases its business operations entirely.
   

Take Action to Safeguard Your Future

Understanding the serious personal risks associated with compulsory liquidation highlights the importance of ​taking proactive measures. Opting for voluntary liquidation can provide a strategic pathway to protecting ​your interests as a director in South Africa. Seeking professional guidance early on is paramount to averting ​potential crises.

Secure Your Future: Make Informed Choices

Take proactive steps now to secure your future as a director in South Africa. Early action and informed ​decisions can help mitigate the risks associated with liquidation.

Understanding Rehabilitation in South Africa

Rehabilitation is a crucial legal process under South African law that allows an insolvent individual to regain their creditworthiness ​and participate in the economy again. It's governed by the Insolvency Act (Act 24 of 1936).

When Can You Apply for Rehabilitation in South Africa?

You can apply for rehabilitation 12 to 48 months after the provisional sequestration order is granted. This process involves a second ​High Court application, where the Master of the High Court instructs all credit bureaus to mark the individual as "Rehabilitated."

Benefits of Rehabilitation

Rehabilitation brings several benefits, including:

• Bringing an end to sequestration.
  
• Discharging all pre-existing debts not arising from fraud by the individual.
  
• Relieving the individual of any disabilities resulting from the sequestration.
  

The Rehabilitation Process in South Africa

Before commencing the process, your attorney will:

• Obtain your Liquidation & Distribution account confirmed by the Master of the High Court.
  
• Provide six weeks' written notice of your intention to apply for rehabilitation.
  
• Confirm with the court-appointed curator if any contribution was levied against your estate.
  

Your attorney will then prepare a substantive application supported by an affidavit to demonstrate your eligibility for rehabilitation.

Upon the court granting the rehabilitation order, the credit bureaus must update your credit record, removing the word ​"sequestrated" and replacing it with "rehabilitated." Additionally, all pre-sequestration debt records must be expunged from your ​credit report.

Rehabilitation in South Africa offers a pathway for individuals to clear their financial past and re-enter the economy as ​creditworthy consumers. It's essential to understand the process and seek professional guidance for a successful rehabilitation ​journey.

Optimizing Your Debt Management Strategy for Better Financial Health

When facing financial challenges, you have several options to address your debt without resorting ​to sequestration:

1. Debt Review: Undergo debt review to negotiate payment plans directly with creditors, ​potentially reducing your payments.

2. Prescribed Debt: Consider prescribed debt if your outstanding debts have remained unpaid for ​over three years. This option allows for arranging new payment plans with creditors, albeit with ​potentially higher interest rates.

3. Administration: Seek an administration order from a Magistrate court, which imposes restrictions ​on making further debts and keeps creditors at bay.

4. Consolidation: Explore debt consolidation, where you arrange a payment plan lasting five years ​or more directly with creditors.

When optimizing your debt management strategy, consider factors such as the number of creditors ​you have and the likelihood of success with prescribed debt within the three-year prescription ​rate.

Taking proactive steps towards managing your debt can lead to improved ​financial health and peace of mind.

Terms and Conditions for Sequestration Process

The below outlines the terms and conditions applicable to the sequestration process. It is

designed to provide you with a clear understanding of your rights, responsibilities, and the overall

process. Sequestration is a legal procedure for individuals who are unable to pay their debts,

allowing for a structured approach to address outstanding financial obligations.

1. Definition of Insolvency:

- Insolvency occurs when debts exceed assets or when financial obligations can't be met promptly.

2. Sequestration Process:

- Begins with voluntary estate surrender or creditor-initiated compulsory sequestration.

- Involves petitioning the court, legal proceedings, and obtaining a sequestration order.

3. Rights and Duties of the Insolvent:

- Protected from creditor legal actions.

- Must fully disclose assets and liabilities and cooperate with appointed trustees.

4. Claims by Creditors:

- Creditors can lodge claims against the estate, which are verified and addressed during asset distribution.

5. Administration of the Insolvent Estate:

- Trustees manage the estate, handling asset collection, creditor payments, and court reporting.

6. Consequences of Sequestration:

- Includes loss of asset control, credit rating impact, and potential credit access restrictions.

7. Rehabilitation:

- Restores creditworthiness typically four years post-sequestration, potentially earlier under specific conditions.

8. Legal Obligations and Penalties:

- Full disclosure and honesty are crucial.

- Non-compliance or fraud may lead to fines or imprisonment.

9. Discharge of Debt:

- Most debts are discharged upon sequestration, with exceptions like secured debts or fines.

10. Appeal Process:

- Individuals have the right to object or appeal certain decisions or actions during the sequestration process.

This list format provides a clear and concise overview of the terms and conditions applicable to the ​sequestration process.

Fill out the form and we ​will contact you!

Jackie Beyers

Sequestation Expert

+27 84 207 7674

jackie@rorqual.co.za

www.rorqualconsultants.com

Make Informed Decisions & Secure Your Future