(Also Known As Sequestration Or The Voluntary Surrender Of An Estate)
A sequestration order places an insolvent person’s estate in the hands of a trustee, who must sell the assets and distribute the cash among the creditors.
You can voluntarily surrender your estate by showing that:
- Your estate is insolvent;
- You own sufficient realisable property to meet all the costs of sequestration; and
- Sequestration will be to the advantage of your creditors as a whole.
A court will not grant an order of sequestration if you have so few assets that your sequestration would lead to your creditors receiving a negligible dividend. At present, you need to show an advantage to creditors of at least 20c in the Rand. So if you owe creditors, say, R100,000, you must come up with cash or assets of at least R20,000.
If you qualify, through our firm, you must publish a notice of intention of going into voluntary sequestration, in the government gazette not more than 30 days and not less than 14 days before your application is to be heard in court. The notice must also be published in a newspaper circulating in the area in which you live or, if you are a trader, the area in which your principal place of business is located. You must send a copy of the notice within seven days of its appearance in the Government Gazette to each of your creditors.
Before the notice is published, you must comply with the formalities required by law – for example, prepare a full statement of income, liabilities and assets in a standard form, which must be verified by affidavit. The form must be made available for inspection by your creditors at the office of the Master of the Supreme Court and the magistrate’s court for the area in which you live or carry on business. All your possessions, including bonded property, must be declared and given an estimated value.
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