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What is the difference between sequestration, administration, and debt counselling?


Debt Counselling


Application is brought before the High Court of South Africa.  The application can be enrolled within five weeks.

Application is made with the Magistrate Court, but it can take up to a year before it is enrolled.

Application is made in the Magistrate Court.  Application will be enrolled within two months.

Court rules entail that all creditors are included and that the court order must be accepted by all creditors.

Debt that has already been handed over to attorneys for legal action is excluded.

“Cash loan” agreements are excluded from an administration, and you have to will still pay the monies outstanding.

No maximum debt for application to be lodged. 

No maximum debt to apply.

The maximum debt for administration is R50 000.00

Should you owe, for example, an amount of R50 000.00, you only pay back R18 000.00 – it does not accrue interest. 

You pay the entire amount, plus interest and costs.

Should you owe for example R50 000.00 it still accrues interest and costs in other words you will pay back approximately R132 000.00

No further debt can be made.

No further debt can be made.

No further debt can be made.

You pay the money directly to the curator. 

Monies are paid to a distributing agent who will then pay the creditors.

Your employer must give permission that the repayment amount is deducted straight from your salary.

Should you have an immovable asset (house), it will be sold by the curator to pay the creditors.

Should you have an immovable asset (house), you may keep it if the bank has accepted a minimum payment and legal action has not yet been taken.

Should you have immovable assets, you must still pay the premium sand can keep the property.

You have decided that sequestration is the ideal solution for your situation. How does it work?

Here is a step-by-step summary of the process.

  1. We publish an advert in the Government Gazette and the Citizen. This will prevent any further legal procedures against you, i.e. execution notices, seizure on your movable and/or immovable property, etc.
  1. Two documents (Founding affidavit and Statement of affairs)are drawn up for you to sign in front of a commissioner of oath.
  1. A registered letter is forwarded to all your creditors as notice of the surrendering of your estate. Your creditors thus contact me for information. 
  1. The South African Revenue Services are also notified, even if you are not registered with SARS.
  1. On the day of the court proceedings an advocate will represent you, there will be no need to attend any court hearing in person.
  1. After the application has been approved and granted by the Court, a curator is appointed to handle all financial matters on your behalf. The curator will contact you to arrange a consultation to explain the details. If you live outside of Pretoria or Johannesburg a telephonic consultation will suffice.
  1. Progress updates will occur on a weekly basis; at which time you will be updated with the latest developments with your application.

Advantages of surrendering your estate:

  1. Your salary and other income is still your own and you do not have to pay any creditor.
  2. Only your creditors are notified of the process and not your employer or any other person. You will not be discharged from your work because of it.
  3. You will not have to attend court.

Disadvantages of surrendering your estate:

  1. You will be insolvent for at least the next 2-4 years. There are circumstances where you can apply for rehabilitation after 18 months, but keep in mind that this is an exception rather than the rule. For your insolvency period, you will not be credit worthy. 
  2. You may not have a cheque account or a credit card facility. You may under no circumstances occur any debt.