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Sequestration

Compulsory Sequestration

Compulsory sequestration takes place when someone who a liquidated claim of at least R100.00 (one hundred Rand) successfully applies on the grounds of actual insolvency or more commonly by reason of the debtor committing an act of insolvency. The applicant must provide security for all costs of administration of the estate.

Acts of Insolvency

The creditor can launch an application if the debtor has committed an act of insolvency. Very briefly the acts of insolvency are:

  • The debtor, with an attempt to delay payment of his debts, has left the country or has remained outside the country, or has left his dwelling or otherwise absented himself.
  • Insufficient disposable property was found to satisfy a Court judgment.
  • The debtor makes any disposition of property which has the effect of prejudicing his creditors.
  • Debtor removes or intends to remove any property with the intent to prejudice his creditors or prefer one above the other.
  • The debtor makes or offer to make an arrangement with any of his creditors to relieve him wholly or partially from debts.
  • The debtor gives written notice to any of his creditors that he is unable to pay his debts.
  • The debtor being a trader gives notice in the Government Gazette and two Afrikaans newspapers and 2 English newspapers that he intends selling his business and is thereafter unable to pay his debts.
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