ADVANTAGES AND DISADVANTAGES OF SEQUESTRATION
WHAT ARE THE ADVANTAGES OF SEQUESTRATION?
- Creditors will not be able to take further legal action against you, alleviating much of the pressure associated with being over indebted.
- The trustee appointed becomes an intermediary between you and your creditors, dealing with all correspondence relating to your debt.
- Once you are sequestrated you do not have to repay the debts which you had immediately before sequestration. The creditors claims now vests in the insolvent estate
- After publication of the notice in the Government Gazette, it is unlawful for the sheriff to sell any property in the estate which has been attached under a writ of execution, or other similar process, unless the sheriff could not have known of the publication.
The court may, however, order the sale of attached property to proceed if the value of the property does not exceed R5,000, and if it would be to the benefit of the creditors. Other civil proceedings may continue. For example, writs may still be granted. - All income that you have earn after sequestration can be used exclusively for living expenses as you do not have to pay creditors.
- Publication of a notice of surrender has no effect on civil and criminal matters proceeding. Attachment of goods can proceed although the actual sale in execution is stayed.
WHAT ARE THE DISADVANTAGES OF SEQUESTRATION?
- Losing control of assets, such as your home and car, is a possibility as assets will vest in the insolvent estate.
- Your sequestration will be listed on the credit bureaus which affects your creditworthiness and ability to incur further debt.
- You will not be able to act as the director of a company.
- Certain professions, such as attorneys, sheriffs accountants and estate agents, exclude sequestrated individuals.
- The consequences of sequestration last until rehabilitation.
More about Sequestration
What is Sequestration?
Types of Sequestration?
The Process
Advantages Disadvantages
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