Your Trustee will remain in office for a further period of two years, during which time they may continue to realise your assets. Even though you have been discharged, you must cooperate with your Trustee. It is possible that your home may need to be sold or remortgaged in order to raise money if you own part or all of it.
This is not always the case, however, and much depends on whether the cost of raising money in this way makes it a viable option. This is a decision that only your Trustee can make. Losing control of assets, such as your home and car, is a possibility. Sequestration will be noted on your credit file for a period of time, which is dependent on certain factors determined by credit agencies and how creditors view the information.
Your sequestration can be viewed in the public Register of Insolvencies. To enter sequestration yourself you need an approved money advisor to agree that you are in fact insolvent, and that other procedures are not more suited to your circumstances.
Once this has been established, they will issue a Certificate of Sequestration which is valid for 30 days. They may already have sent you a Statutory Demand, and will lodge a petition for your sequestration with the court.
Creditors will not be able to take further legal action against you, alleviating much of the pressure associated with being in debt Your Trustee becomes an intermediary between you and your creditors, dealing with all correspondence relating to your debts Once you are discharged you do not have to repay the debts which you had when you were made bankrupt, although there are some exceptions to this.
You are still responsible for paying: fines, penalties, compensation and forfeiture orders imposed by any court; any liability due to fraud including benefit overpayments; any obligation to pay ongoing aliment; some students loans; and money owed to someone who holds a security on your property, such as a mortgage or secured loan.
Apart from the exceptions listed above, your pre-bankruptcy creditors will not be able to take any legal action against you to recover their debts. Additionally, you must not have been in sequestration during the previous five years. If you can afford to, you will need to continue making repayments from your income for a further period of 36 months.
Your Trustee will remain in contact, and you are obliged to cooperate fully. Alternatively, your Trustee may ask you to sell it and buy a cheaper one so that you can put the difference to paying off your debts. The entire process may take up to 34 months from date of Sequestration although in some instances it can be concluded in less than 24 months. All aspects depend on your unique personal circumstances.
What does the sequestration process entail? The norm is that this variates between 20c and 25c in the Rand The day of the court case: As sequestration is a High Court application an Advocate will present your case to the Court on your behalf.
This document will give the insolvent permission to apply for rehabilitation. Form B3 can be found on the Federal Court website. Further details regarding filing fees for Federal Court forms can be found on the Federal Court website. This is legal information only and does not constitute legal advice.
You should always contact a lawyer for advice specific to your situation. Home Resources What is a sequestration order? What is a sequestration order? This fact sheet explains what sequestration orders are, the consequences and what to do if you receive one. This fact sheet covers: What is a sequestration order? What happens when I receive a sequestration order? When and how to apply for a review of your sequestration order. Fact Sheet: What is a sequestration order?
What is a Sequestration Order? Consequences of a sequestration order When a sequestration order is made against you, a trustee will be appointed to manage your financial affairs.
Related resource An instruction sheet for completing the statement of affairs is located on the AFSA website. Consequences of bankruptcy Some of the consequences of your bankruptcy which usually lasts for 3 years from the date you file your statement of affairs with AFSA include the following: The trustee can sell your assets or property to pay your creditors. However, beyond that, you will not have to pay most of your existing debts and demands from creditors should generally stop.
If you obtain assets while you are bankrupt, these assets may be sold by the trustee. If you own property such as a house or apartment , the property or your share of the property may be sold to pay your creditors.
The trustee may also reclaim property you sold prior to becoming bankrupt. If you seek to get credit from another person, or pay for goods or services by cheque, over a certain specified amount, you must advise the person that you are bankrupt. Not only have you got to a point where Sequestration may be the best option, but you also need someone very firm and knowledgeable about your rights to help you deal with your debts and those who want you to pay them.
Common exceptions to this are if you owe money for secured loans such as a mortgage , student loans, benefits overpayments or have to repay money as part of court order. Other creditors of unsecured debts such as credit or store cards, loans and overdrafts must leave you alone and deal only with your Trustee.
However, you may find that if you have any property on HP the company that you hired it from may be able to collect it. Apart from some statutory exceptions, your unsecured debts will be bound in your sequestration.
If you are able to afford them, you will be required to make payments towards your debts from your income for 36 months. Although you are discharged from bankruptcy after 12 months you will continue to make your payments as long as you can afford them until the 36 months are completed. A lot of people think Sequestration lasts a whole six years, the time it stays on your credit report and it puts them off from seriously considering this option. Nothing could be further from the truth.
People often mix up the length of time the Order stays on your credit record with how long it takes to be discharged. You will be discharged after 12 months depending on your circumstances and from then on, your bankruptcy will appear on your credit record for six years. Parting with your assets can be difficult and is often one of the reasons people avoid sequestration as a legitimate solution to the trouble their finances are in.
However, which assets you give up depends entirely on their worth. For example, if you have equity in your property it is very likely your Trustee will want to release it up to the value of debts and costs, but if it will cost more in fees and penalties to release that money, they may not bother. Likewise if you own joint assets , say with your spouse, they may be able to buy out your share of the asset thereby releasing cash to your creditors and allowing you to continue to enjoy it.
In appropriate cases, Sequestration gives something that no other Scottish debt management solution gives — almost instant relief from the stress of dealing with debt.
Debt Arrangement Schemes and Trust Deeds can often sometimes prolong the pain, although if you are determined to go down this route they can teach you how to stick to and manage a strict budget, which is a very useful skill to have.
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