“Rehabilitation” is the legal process by which an Insolvent (a sequestrated individual) is relieved of the legal implications of being an Insolvent and restored to the legal status of a credit worthy consumer (a “solvent”). The process is also governed by the Insolvency Act (Act 24 of 1936).

Being rehabilitated allows you to take part in the economy again and to leave the past behind by clearing your credit record.

The law provides for the fact that you may apply to the High Court for a rehabilitation of your estate after four years of date of insolvency, thus restoring your credit worthiness. If you do not apply, you will be automatically rehabilitated only after 10 years.

Rehabilitation Means

  • the Sequestration is brought to an end;
  • all debts of the Insolvent which were due (or the cause of which arose) before the Sequestration, which did not arise out of any fraud by the Insolvent, are discharged; and
  • the Insolvent is relieved of any disability resulting from the Sequestration.

The Rehabilitation process

Before the process begins, as your attorney, we will write to your Curator to obtain your Liquidation & Distribution account confirmed by the Master of the High Court. Armed with this information we will give six week’s written notice of your intention to Apply to the High Court for your rehabilitation order. The Insolvency Act provides for rehabilitation anything from six months to four years after sequestration with various conditions. It is therefore prevalent to contact us well in advance to enquire.

We also, on instruction, need to confirm with the court appointed curator of your estate whether there was contribution levied against your estate or not. Contribution is levied against the creditors when the estate could not generate enough funds to pay for the administration costs of the estate. The contribution amount may vary. The contribution amount has to be paid to the estate before the court will allow rehabilitation.

We will prepare a substantive application supported by an affidavit signed by you to convince the court that you are eligible for rehabilitation.

Once the rehabilitation order is granted, we send a copy of it to the credit bureaus. They must then remove the word “sequestrated” and replace it with the word “rehabilitated”.

Record of all debt that was incurred before date of sequestration must also be removed so that your record is clean.

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