Financial rehabilitation is a necessary process after a person has been declared insolvent and undergone sequestration. Rehabilitation is the period after sequestration, where the once insolvent party can begin the process towards their new financial life and once again become a financially active member of society. Simply put, it signals the end of insolvency and sequestration. This process is governed by the regulations within the Insolvency Act 24 of 1936. In this guide, we explore some frequently asked questions about financial rehabilitation and discuss how our experts can guide you to financial independence.
Frequently Asked Questions About Financial Rehabilitation
When it comes to understanding this process and what exactly it means, people naturally have many questions. Here are common questions that we get asked by clients.
When can a person be rehabilitated?
Financial rehabilitation can occur under several circumstances. An insolvent party can apply for rehabilitation once all creditors have been repaid after sequestration. Conversely, they can also apply six months after sequestration if no claim has been lodged against their estate. Furthermore, an insolvent party is granted automatic rehabilitation 10 years from the date that they were sequestered. In such a case, no application is necessary as it will automatically occur.
Do I need to repay any debts before financial rehabilitation?
No. Financial rehabilitation occurs have sequestration. Under this process, the Court seizes the assets of the insolvent party, and a Trustee sells and distributes them accordingly to manage the insolvent person’s debt. As such, old creditors can never force you to pay any of this old debt as it is overseen by the Trustee.
What will the Court look at before granting rehabilitation?
Before the Court grants the once insolvent party financial rehabilitation, they need to determine several factors. Firstly, is the person able to manage their money responsibly, and, secondly, have all legal requirements been met? If any financial contributions must be paid – any monetary shortfall that occurred during winding up the estate and was paid pro-rate by creditors – this must be paid back before rehabilitation is granted.
What are the advantages of financial rehabilitation?
There are many advantages to financial rehabilitation. It is the official end of sequestration, meaning it ends an individual’s insolvent status and all the limitations this entails. Financial rehabilitation changes the person’s status from insolvent to solvent, meaning that they can once again become a creditworthy member of society, enjoy an active and participatory role within the economy and rebuild their financial life. Being creditworthy is imperative when it comes to purchasing vehicles and homes since many of us cannot simply buy these assets with cash alone and thus need loans to secure them.
We are always available to offer expert legal advice on financial rehabilitation. Navigating the administrative elements of the process can be challenging and the seasoned attorneys at Francois Uys Inc. are ready and available to handle all the legal complexities on your behalf.
Reach Out to Our Qualified Attorneys
If you would like to learn more about financial rehabilitation or are wondering if you qualify, reach out to our experienced attorneys for a free, zero-obligation call. We are experts when it comes to litigation in the realm of insolvency law. Our team is always available to discuss your unique needs and determine whether rehabilitation can be granted.
You can start by completing a free rehabilitation assessment form online and sending it to us so that we can determine whether you qualify for rehabilitation. With over 33 years of collective experience and more than 8000 successful cases and counting, we are here to support you with your insolvency and financial rehabilitation needs.
Disclaimer: This article is for information purposes only. It does not constitute legal advice and cannot be used to make any decisions. For advice on the topic of sequestration and financial rehabilitation, contact Francois Uys Inc. The information is relevant as of the date of publishing.
