Sequestration
Sequestration: Your Path to Financial Recovery with CreditSmart
When debts become unmanageable and all other debt relief options have been explored, sequestration may be a viable solution to consider. This process is designed for individuals whose debts exceed the value of their assets, yet who have substantial equity in those assets to potentially cover their liabilities.
When debts become unmanageable and all other debt relief options have been explored, sequestration may be a viable solution to consider. This process is designed for individuals whose debts exceed the value of their assets, yet who have substantial equity in those assets to potentially cover their liabilities.
What is Sequestration?
Sequestration is a formal legal procedure that involves surrendering your estate, both assets and liabilities, to a court-appointed curator. This action is taken to manage and liquidate your assets under court supervision and use the proceeds to pay off creditors, thereby declaring you insolvent.
The Benefits for clients
- Immediate halt to any creditor-initiated legal actions.
- Recorded insolvency on credit records for two (2) to four (4) years.
- Direct handling of creditor negotiations by the appointed curator.
- Inability to obtain credit, use overdraft facilities, or hold credit cards.
- Protection against wage garnishment.
- Exclusion from directorial positions or certain professional fields.
- Freedom from creditor harassment as they must now deal with the curator.
- Possibility of retaining vehicles under certain agreements.
- Clearing of judgments against your name on successful sequestration.
The Process of Sequestration:
Initiating the Process
It begins with a petition to the High Court. Upon review, if the court determines there is enough equity, it will authorise the sequestration.
Curator Appointment
The court will appoint a curator who takes over the management of your estate. The curator’s responsibilities include liquidating your assets in accordance with South African solvency laws and ensuring that creditors are paid from the proceeds.
Asset Liquidation
The success of a sequestration depends on the curator’s ability to liquidate at least 20% of the owed value from the estate’s assets. Full repayment is required if the estate includes high-value items like homes or cars.
Debt Relief
Following the court’s approval of the sequestration, you will no longer need to make payments directly to creditors.
Credit Restrictions
Post-sequestration, you will be unable to enter into new credit agreements for a period ranging from two (2) to four (4) years, after which you can seek rehabilitation.
Frequently Asked Questions
Am I eligible for sequestration?
The process is suitable for individuals whose debts exceed their assets but who have sufficient asset equity to cover these debts.
Duration of the sequestration process?
This can vary based on your specific financial circumstances but generally completes within a few months.
Can I keep major assets like my home or car?
This depends on the equity of the assets and decisions by the curator.
What happens post-sequestration?
You may apply for rehabilitation to remove insolvency from your records and restore financial standing.
How does CreditSmart protect me?
By working with reputable legal professionals, we ensure fair management of your assets and smooth navigation towards financial recovery.
Why Opt for CreditSmart’s Sequestration Services?
CreditSmart ensures a dignified and efficient management of your sequestration process. We collaborate with leading legal experts to prioritise your financial rehabilitation, paving your path towards a debt-free life with utmost care and professionalism.