Voluntary Sequestration is a debt relief option where insolvency practitioners negotiate with creditors to wipe out unsecured debts, offering individuals relief from long-term financial burdens. Once Voluntary Sequestration is approved, creditors are legally barred from pursuing further action, such as legal proceedings or recovery efforts, providing peace of mind and a fresh start.
What do you want to know about Voluntary Sequestration?
Voluntary Sequestration provides over-indebted individuals a legal pathway to relieve most debts and start anew by submitting a Voluntary Sequestration Application Form, which, if approved, typically results in a 36-48 month order. During this period, debt obligations are managed under the order, and upon completion, individuals generally regain their creditworthiness. This proactive approach helps manage financial difficulties efficiently, potentially reducing the burden of long-term debt and facilitating a fresh financial start.
Voluntary Sequestration is a legal process initiated through a High Court application, enabling individuals to write off approximately 60-75% of unsecured debt, with the remaining 25-40% payable either through lump sum payments or installments over 18-24 months. Upon court approval, a trustee is appointed to oversee the fair distribution of the remaining debt to creditors, effectively making the individual debt-free after this period. However, obtaining a Clearance from Voluntary Sequestration, which confirms full debt settlement, can only be sought after 36-48 months, ensuring the process is complete and all obligations are fulfilled.
Am I eligible for Voluntary Sequestration?
Do I Qualify for Voluntary Sequestration?
You can apply for Voluntary Sequestration if you meet these requirements:
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you are unable to pay your debts when they are due.
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your debt has been handed over to collection agencies.
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you have shortfalls from assets such as vehicles and a home that has already been repossessed.
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You have tried Debt Review and the installment is still not low enough to assist in managing your monthly living expenses.
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You have judgements and emolument attachments on your income.
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Debt must be more than R150,000.
Types of Debts that are included in a Voluntary Sequestration application:
Shortfalls from repossessed Homes
Shortfalls from repossessed Vehicles
Personal Loans and Pay Day Loans
Overdrafts and Revolving Credit Plans
Credit Cards and Store Cards
Tax owing to SARS
Cell phone Contracts
Medical Debt
Arrears School Fees
Other third-party Contracts