What is the sequestration process?
Sequestration is a legal process, which can be better understood by reading the following steps:
The Sequestration Procedure:
- An advert gets published in the Government Gazette and the Burger. This will prevent further legal action against you
- An Ability statement is drafted that you must sign before a Commissioner of Oath. This document is submitted for inspection at the Master of the High Court for 14 days or with the local Magistrate
- Thereafter a registered letter is forwarded to all credit providers as notice of the surrendering of your estate
- SARS will also be notified
- At the day of the Court proceedings an Advocate will represent you
- After the application has been approved and granted in Court, a Curator is appointed to handle all financial matters on your behalf
- The Court Rules determine that you pay between 20c and 22c in a rand benefit to your creditors. In other words if you owe FNB R1.00, they should get 20c thereof. The benefit of this approach is that the repayment amount does not accrue interest
- The client receives a document to list all household items. This document gets forwarded to the valuator to establish the value of the items. Your assets will be evaluated at a market related price
What happens to your vehicle during the sequestration process?
- If your vehicle is under hire purchase, the Rule of Court stipulates that any bank may repossess the vehicle.
- Should your instalments be up to date the financial institution may consider your request to keep the vehicle. There is no guarantee that you may keep your vehicle, especially should your vehicle be in arrears.
- Vehicles registered in another person, or legal person, name will not form part of the estate
What are the disadvantages of sequestration?
- You will be insolvent for at least the next 2 to 4 years.
- There is circumstances where you can apply for rehabilitation after 18 months, this is an exception rather than the rule.You may not have a cheque account or credit card facility.
- You may under no circumstances engage in any debt arrangements.
What are the advantages of sequestration?
- Your salary and other income is still your own and you do not have to pay any creditor
- Only your creditors are notified of the process and not your employer or any other person. You will not be discharged from your work because of it
- You will not have to attend Court
- Your curator can arrange with your financial institution to keep your vehicle and if your instalments are up to date
What are the sequestration fees?
- The amount payable is R5100.
- The Government Gazette’s cost amount to R80 and the Burger R590
- The Valuer amount is R3500. Registered mail that is sent to creditors costs R20 per letter
- Full payment of R5100 must be made before the application for the surrendering of your estate commence
Sequestration can have many advantages and disadvantages.
If you are struggling to decide what the best solution for your debt problem is, call DebtBusters today on 0869990606.
DebtBusters expert consultants will advise whether sequestration is an option for you.