Sequestration Explained Simply
Sequestration is the process of selling or using assets to cover outstanding debts with creditors. Sequestration is presented in two forms in South Africa: Voluntary sequestration, where the indebted individual opts to use assets to cover debts, and compulsory sequestration where a court attaches assets as a form of settlement for debts.
Sequestration is the voluntary surrendering of your estate (financial affairs) to the High Court under the governance of the Insolvency Act 24 of 1936.
It is an application brought in the High Court of South African, by an attorney in cooperation with an advocate on behalf of the debtor which ultimately allows the debtor (the applicant) to write of 80% of his/her debt as a final resort to escape insurmountable debt accrued through circumstance beyond his/her control.
Sequestration is thus the process by which a debtor who has become insolvent (someone who’s financial liabilities exceeds that of his/her income) can obtain the legal status of Insolvent in order to enjoy the benefits of the status. The debtor is relieved from further obligation to pay his/her creditors as stipulated by the original creditor’s agreement, and the creditor’s agreement and claims are brought to a close once they have received their benefit from the insolvent estate.
Benefits Exclusive to Oyisa United Debt Specialists:
- Tailored repayment structure unique to your individual needs;
- Accumulate your debt into one easy and affordable installment, you pay one affordable monthly repayment amount towards all your debt 30% and up (though higher reductions are case dependent as nobody shares the same debt concerns or balances);
- Negotiating better interest rates with your creditors;
- Extending your debt repayment periods,
- enables clients to make monthly debt repayments;
- Cash flow relief from your next pay cheque;
- Provide for your family’s vital living expenses;
- Pay off your debts in a reasonable time period;
- Protection against your credit providers relieves clients from creditors and debt collectors harassing you for money, they are to communicate your DC not you!
- The National Credit Act protects you, you are legally protected in terms of the NCR;
- Your assets listed under the Debt Review process are also legally protected;
- No more financial stress!
- Free debt assessment;
- A Debt Counsellor will formally review the clients finances, develop a suitable monthly budget and negotiate with credit providers on their behalf;
- Personal Relationship Manager guiding you through the process;
- Maps out the path for reducing bad debt and becoming debt free;
- Oyisa’s debt counsellors will educate clients about their financial rights and how to work better with their finances;
- Nationwide Assistance;
- Prevents clients from declaring bankruptcy;
- Legally clear your “blacklisting” by getting a Clearance Certificate upon completion of the Debt Review process;
- You have the opportunity to repair your credit profile;
- The cost of this process is much less than that of foreclosure, Administration, judgment and sequestration;
- Decreases the chances summonses and judgments against clients;
- Optional cover through inexpensive Credit Linked Insurance (discuss this option with you DC).
Liquidation (Business Insolvency)
Liquidation (Business Insolvency)
When a business fails and is unable to pay its debts, it is placed into liquidation. Liquidation encompasses the process of a liquidator taking charge of the estate and selling the assets by way of public auction. If auctioning off the client’s assets does not generate enough revenue to pay off debt, credit providers will turn to personal sureties to pay the difference. If the directors or members cannot settle the outstanding debts, then they have the option to include these debts under debt review, or apply for sequestration in their personal capacity.