SEQUESTRATIONS

What is a sequestration? Sequestration is the voluntary surrendering of your estate under the governance of the Insolvency Act 24 of 1936. The Lawful requirement in order to surrender your estate is that you must be able to pay our creditors at least 20 cents for each R1.00 of Debt. The purpose of this specific remedy is in order to free yourself from your creditors and at least 80% of your debt. The negative effects:

1. While being sequestrated and under the care of a Curator, you will not be in a position to conclude any further contracts without the consent of the relevant Curator.
2. Your credit record would reflect that you were sequestrated.
3. You will not be in a position to act as a director or member of a company or closed corporation anymore.

A person can be sequestrated on the following two bases:

1. Voluntary sequestrations:

This procedure comes into effect when a debtor wishes to sequestrate himself. Persons who may apply for Voluntary Sequestrations are:

1. The Executor of a deceased estate
2. Where a Curator Bonis was appointed on behalf of a person who is unable to manage his own affairs, such Curator may apply for sequestration for the person’s estate on whose behalf he is acting as Curator Bonis
3. A debtor or his agent may apply to sequestrate the estate of a natural person
4. A partnership where all the partners are resident in South Africa may apply or their agent
5. When spouses are married in community of property, both spouses may at the same time apply for the joint estate to be sequestrated

2. Compulsory Sequestrations: According to the Insolvency Act 24 of 1936, an act of insolvency is the following:

1. 1. If a debtor leaves the Republic or is out of the Republic and remains absent with the intent to evade or delay the payment of his debts
   2. If judgment was given against a Debtor and he fails upon demand to satisfy such judgment, and/or the return made by the officer of the court that the debtor does not have sufficient disposable property to satisfy such judgment
   3. If he makes or attempts to make any disposition of any of his property which would have the effect of prejudicing his creditors or preferring a creditor above another creditor.
   4. If he makes or offers to make any arrangements with any of his creditors for releasing him wholly or partially from his debts;
   5. If he gives notice in writing to any one of his creditors that he is unable to pay any of his debts.

Written by SD Nel