How Insolvency Attorneys Can Assist You When You Are Declared Insolvent
What begins with a credit card, a few clothing accounts, a home loan and vehicle finance can escalate into a situation where you are on the balancing point between solvency and insolvency. Getting into debt to a degree that becomes a serious financial problem happens far more easily than one would think. One small change in your circumstances can result in you falling behind on your payments.
Any unbudgeted, ad hoc cost such as a medical procedure not covered by medical aid or an increased interest rate on your bond can lead you on the road to financial distress. Your situation is particularly precarious when you have no savings. If you find yourself in this position, your best option is to consult with attorneys who have specific experience in dealing with debt, insolvency and sequestrations. The sooner you do this, the more beneficial it will be to your financial and legal position.
It is difficult for the average person to know what the correct legal and financial steps are to achieve the best possible outcome when their debt is out of control. This is especially true when their creditors are hounding them for money that they just don’t have. Speak to an attorney who understands what you are going through and can guide you to the best outcome for your specific situation.
What Is Insolvency?
Legally, the moment your liabilities exceed your assets, you are considered insolvent. Being commercially insolvent is when you can’t pay your debts but have enough assets to cover your liabilities. This is more of a liquidity or cash flow problem and is not insolvency in the true sense.
You are formally insolvent when your estate is placed under sequestration. Once a court has issued an order accepting the sequestration of your estate, you are declared insolvent.
You may apply for sequestration yourself or one of your creditors may make the application. These are known as voluntary or compulsory sequestration respectively. Consulting an attorney will allow you to make the correct decisions on whether and when to apply for sequestration which will ensure that you act on the best possible terms.
How Will an Experienced Attorney Assist You?
Experienced attorneys will advise you on steps you can take to avoid dealing with your creditors and will handle all communication with them on your behalf. If appropriate, they will represent you in opposing any insolvency proceedings brought against you. Where they are of the opinion that voluntary sequestration is the best course of action, they will assist you with your application.
Having an experienced attorney to negotiate with the court-appointed trustee or curator may put you in a position to buy back some of your specific assets, usually furniture, from your insolvent estate. They can prevent creditors from taking further legal action against you and stop certain pending actions from proceeding.
In general, an insolvency and litigation lawyer will support you through the process, from being insolvent to being debt free and eventually to complete rehabilitation and restoration of your creditworthiness. Insolvency and indeed any form of financial distress can be extremely stressful. Placing your debt problems in the hands of a specialist attorney will relieve a great deal of the anxiety associated with insolvency.
Do Yourself a Favour by Consulting with a Professional Attorney
Being declared insolvent and having your estate sequestrated is an area of the law that can be complex and nuanced. The legal process includes strict formal requirements. Some processes are time sensitive and missing the window in which certain actions must occur can result in costly, undesirable outcomes. Poor decisions can dramatically alter the result to the detriment of the insolvent party.
Is your debt out of control? With over 33 years of specialist experience with insolvency and sequestrations and an extensive list of satisfied clients, call Francois Uys Incorporated Attorneys and start the journey to creditworthiness.
Disclaimer: This article is for information purposes only. It does not constitute legal advice and should not be used to make any financial or legal decisions. For advice on the topics of insolvency and sequestration contact Francois Uys Inc. The information is relevant as of the date of publishing.
