FAQ’s – Rehabilitation after Sequestration

FAQ’s – Rehabilitation after Sequestration

The following are frequently asked questions about Rehabilitation after Sequestration

Q: Generally, when can I apply to be rehabilitated?

A: After 4 years calculated from the date on which you were sequestrated.

Q: What is the cost of a rehabilitation application?

A: We charge a set fee for rehabilitation applications. Fees can be paid off over a maximum period of 6 months. In some instances we do allow clients to pay our fee over 12 months. Before we quote, we evaluate whether you can apply for rehabilitation, as we only quote if we can assist.

Q: Does our fee for rehabilitation, include processing the removal of the sequestration notice from the credit bureaux so that my credit record can show that I have since been rehabilitated?


Q: What happens if we find that I do not qualify to apply to be rehabilitated once I have instructed you to attend to my rehabilitation application?

A: If you do not qualify to be rehabilitated then we would stop the process immediately and you would not be liable for the balance of the fee. Whether you do qualify to be rehabilitated will become apparent once we have looked at your Liquidation and Distribution account to check whether any contribution was levied against your creditors. If a contribution was levied, you would have to pay this contribution back to the creditors in order for you to qualify to be rehabilitated. Where the aforesaid occurs, clients either pay the contribution immediately or request that we suspend work on their instruction pending them raising the contribution amount.

Q: Do I have to pay my legal fees to be rehabilitated by way of direct debit instruction?

A: If you are not comfortable to have your instruction processed by way of direct debit instruction, then you can make payments directly to us on a monthly basis. Where this is done, we only release the rehabilitation order and process the updates with the credit bureaux once our fee has been paid in full.

Q: What happens if at the time that I was sequestrated I had property that was bonded and which was subsequently sold as part of the sequestration process for less than the amount due to the creditor? Do I have to pay this amount back in order to be rehabilitated?

A: Immovable property subject to a bond renders the creditor (bond holder) a secured creditor which simply means that the creditor is entitled to be paid out of the proceeds of the sale of the property. Where the property is sold and there is a shortfall from the sale, the balance (shortfall) becomes a concurrent claim which is payable from the free residue of the estate. Adequate satisfaction of a concurrent claim is at least 20 Cents in the Rand. A secured creditor when proving their claim can elect to rely exclusively on his security and in doing so the creditor waives their right to recover any shortfall amount from the free residue. A secured creditor may choose to rely exclusively upon their security in order to avoid having to contribute to the costs of sequestration in the event that there is not sufficient residue to cover the costs of sequestration. Thus, it may or may not be necessary to pay back any shortfall that may have arisen when the bonded property was sold. Before embarking on a rehabilitation application, we do obtain details of the Liquidation and Distribution account from the Trustee and to check whether the insolvent is liable to repay any monies to any secured creditors thereby avoiding wasted legal costs in pursuing a rehabilitation application where there is in fact a shortfall that the insolvent cannot pay.