2. Compulsory sequestration – section 9(1) of the Act
One of the main differences between a voluntary surrender and a compulsory sequestration, is that in the latter, it is brought by and on behalf of the creditors.
- What are the requirements and who is entitled to apply?
- A creditor must have a liquidated claim of not less than R 100.00, and where there are two or more creditors who has liquidated claims against the debtor, they must have a liquidated claim against the debtor of not less than R 200.00.
- The creditor has to sufficiently prove that:
- he has established a claim which entitles him to bring the application;
- the debtor’s estate is insolvent;
- there is reason to believe that it will be to the advantage of the creditors if the debtor’s estate is sequestrated.
It is important to note that being declared as an insolvent has far reaching consequences on an individual’s status. Not only will such an individual find it more difficult to obtain credit or loans, but he/she will also be excluded from certain professions, such as a director or liquidator.
Should you find yourself in the unfavorable position that might result in the sequestration of your estate, it is highly advisable to consult with one of the insolvency attorneys at Burger Huyser Attorneys. The attorneys at Burger Huyser Attorneys are familiar with the liquidation and sequestration process and will guide and assist you to regain control over your financial matters.