FAQ – Sequestration


Sequestration is the process of declaring yourself insolvent / Sequestrated. This is a High Court application under the Insolvency Act.

  1. All debt will be written off !! The Master of the High Court will appoint a Curator to dealt with all your creditors and they cannot pester you anymore;
  2. There can be no Garnishee (attachment) orders on your income or Salary;
  3. Judgements against you are removed by the sequestration order;
  4. Your credit record will be cleared once Rehabilitated;
  5. This High Court order overrules all other court orders such as Debt Counselling, Judgements etc. and they are unenforceable;
  6. A new start in life, debt free, and no more debt stress

A natural person may apply for sequestration if any of the undermentioned applies:

  • Their liabilities (debt) exceeds their assets;
  • Judgement has been obtained on their assets;
  • The client has shortfalls on assets after repossession;
  • The client cannot satisfy their monthly payments to their creditors and declares to their creditors that instalments can’t be met, this is an act of insolvency;

We provide you with a free financial assessment to determine if you are eligible for Sequestration.

If your vehicle is financed under a Hire purchase agreement, your vehicle vests in the insolvent estate and therefore you will lose it. However, if the vehicle is financed on a lease or Rental agreement then the creditor has an option to allow you to keep on paying the vehicle and keep possession of the vehicle. The Curator would consider whether there is any equity in the vehicle value as opposed to the settlement amount.

Should you lose your vehicle we can refer you to a RENT TO OWN company who will allow you to rent a vehicle, of your choice, through them. It would not matter whether you were sequestrated or not and credit worthiness is not a criterion. With the Rent to own you still become the owner of the vehicle once paid and is similar to a Instalment Sale Agreement.

Yes, it is not difficult to find a landlord or rental agent who would be willing to rent a property to an insolvent. There is no legal prohibition.

Once we have been instructed to commence your sequestration, you will not need to deal with your creditor’s calls, you may simply request them to contact us as your Attorney of Record.

Once you are sequestrated no creditor will be allowed to attach your salary. Existing attachment / garnishee orders will be cancelled with immediate effect.

In terms of insolvency law, there are certain assets which your trustee must attach. We will however negotiate that your trustee excludes your furniture from your insolvent estate.

In terms of section 82(6) of the insolvency act, your trustee is not allowed to take your tools of trade, however if your assets are under finance, these assets are not vested in you and will fall within your insolvent estate. If they are fully paid for then it will not be attached

If you are married in community of property, then, yes, your joint estate will be affected by the sequestration. However, if you are married out of community of property (ANC) then your spouse has his/her own individual estate, and it will not form part of your sequestration. Your children’s estate(s) would under no circumstances be affected.

Your retirement annuity is protected against your insolvent estate and so are any funds that pay out to you in terms of a claim for personal injury. However, policies that are ceded to creditors, become property of your creditors.

No. Sequestration does not affect the maintenance order and you will need to continue paying for it. You may approach the maintenance court to reduce the maintenance amount.

Parking tickets, speeding fines, television licenses etc. are all excluded from your sequestration and you must still pay it.

You are allowed to have a business as Sole Proprietor. You are however prohibited from acting as a Director of a registered Company.

No, you may however have to pay the Trustee the value of the firearm.

(only if you are the registered owner )

In terms of the process, you will have roughly 8 months. This may however be negotiated with the appointed Trustee.

Yes. We recommend that you open an account with a financial institution to which you do not owe any money to.

No, you should not keep paying any of your creditors.

The banks make use of collection agents who generally uses intimidation tactics to collect vehicles. The only person that is legally entitled to collect your vehicle is the sheriff of the court and only with a court order.

  • If there are no claims against your estate, you will need to remain sequestrated for at least 6 months before you can apply for Rehabilitation;
  • If there are claims proved against your estate, you will need to remain sequestrated for a minimum of 4 years;
  • You will have to resign any directorship appointments and will not be able to be a director for as long as you are sequestrated;
  • You will not be able to acquire credit;
  • You might have issues working at a financial institution (This will be considered at your employers’ discretion)

You will not need to appear in court personally, we will appoint an advocate to appear on your behalf.

  • Your debt will be written off;
  • You will have a new estate;
  • You will receive a new tax number from SARS