 Insolvency is otherwise known as bankruptcy; liquidation; sequestration and voluntary surrender
Insolvency means you use your assets to get rid of creditors
FAMOUS PEOPLE WHO WERE SEQUESTRATED:
Donald Trump (twice); Walt Disney (before he started Disney Pictures); Abraham Lincoln (16th American President); Milton Hershey (was sequestrated 4 times – on the fifth go he started Hershey’s chocolates – today a huge international company); Meat Loaf; William C. Durant founded General Motors and Chevrolet. General Motors is the biggest car manufacturer in the world today; Thomas Jefferson(American president); Kim Bassenger (actress); Heidi Fleiss(the famous “madam”); Ulysess S Grant (18thAmerican President) ; La Toya Jackson (Michael Jackson’s sister – singer and actress); Larry King (famous talk-show host) ; William McKinley (25th President of the USA)
“Insolvency is for people who cannot repay their debt."
WHAT IS INSOLVENCY?
INSOLVENCY is the only legal mechanism to get rid of creditors.
Insolvency is the umbrella term for liquidation and sequestration.
HOW DOES INSOLVENCY WORK?
When you sequestrate, the house that you own will be sold on an insolvency auction. The money generated from such an auction will be divided amongst your creditors. If there is not enough money, each creditor who does not receive payment of his debt must write the balance off and these monies can never be collected from you again.
If you do not own property, you must be able to pay in cash towards your debt.
INDIVIDUALS SEQUESTRATE/COMPANIES LIQUIDATE :
Individuals sequestrate and Companies (Close Corporations, Companies and Trusts) liquidate, but the process and the concepts are more or less the same.
WHEN DO I SEQUESTRATE?
Never hold on too long. Let the balance sheet speak for itself and make a clinical decision about your finances.
If you struggle to pay your debt, or if debt counselling does not work for you, or if your business is not making enough money, or if the bank is threatening to repossess your property, then it is time to consider sequestration as a matter of urgency to get free of your creditors.
WHAT IS THE DIFFERENCE BETWEEN SEQUESTRATION AND VOLUNTARY SURRENDER
Voluntarily surrender is sequestration. The only difference is in who brings the application to Court for a sequestration order.
When you apply to Court yourself (that means you are then the Applicant), that is voluntary surrender. If you own a Company, the company can also take a resolution to voluntarily surrender.
If a creditor brings an application against you, it is a forced sequestration and then the Creditor is the applicant.
But if the Court order is granted, the result of either application is that you will be sequestrated.
WHEN AM I INSOLVENT?
You are insolvent when your liabilities exceed your assets. In other words, if you cannot pay your debt and cannot sell assets to pay the debt, then you are insolvent.
HOW DO I SEQUESTRATE IF I DO NOT OWN A HOUSE?
If you do not own a house, or if the bank has already repossessed your house and sold it, you will need to be able to have a cash amount to sequestrate. Without owning a house, you will have to be able to pay at least 20c in the Rand towards your debt in cash, plus the sequestration costs. Discuss this option with us please.
If you have other assets of value (furniture and clothing does not count) this can also be used as an asset to sequestrate you with.
I AM UNDER DEBT COUNSELLING
You can still sequestrate even if you are under debt counselling.
If you find that debt counselling does not work for you in the sense that your repayments are too high; or it will take too long to repay the debt, or there are problems with the bank taking action despite the debt counselling, then consider sequestration instead.
If you are going to be under debt counselling for the next 5 years or more, beware that your debt does not increase in this period due to interests and costs. Then it is worth it to rather consider sequestration, as you then are immediately rid of your creditors and you can start saving instead of having to repay a monthly amount towards your debt. That way you can recover sooner.
HOW LONG AM I UNDER SEQUESTRATION?
Four years. After four years you can apply for rehabilitation and you are back to normal.
During the four years that you are sequestrated, you carry on with your financial life, nobody looks over your shoulder.
THE BANK HAS TAKEN JUDGMENT AGAINST ME, CAN I STILL SEQUESTRATE?
You can sequestrate at any time.
If the bank takes judgment against you, the judgment is valid for THIRTY YEARS or until the debt has been paid in full.
If you sequestrate, you remain under sequestration for only FOUR YEARS and then you rehabilitate.
BUSINESSES LIQUIDATE:
If you own a business, (either a Close Corporation or a Company or a Trust) and the business cannot afford its debt, then it is important that you decide to quit sooner rather than later.
In terms of the Close Corporation Act, the Trust Act and the Companies Act a business MUST liquidate when its liabilities exceeds its assets. It is not necessary for a business to own assets. If a business experiences debt problems, liquidation is an excellent option to get rid of creditors.
HOW DOES A BUSINESS LIQUIDATE?
The members, trustees or directors will take a resolution to liquidate the business.
Then an application is made to Court to liquidate the business, a similar process to sequestration.
MUST THE BUSINESS HAVE ASSETS?
No it is not necessary.
INSOLVENCY ACT:
The Insolvency Act is available to all South African citizens and business entities.
WILL I LOOSE EVERYTHING?
No. Your furniture is valued at second hand prices and you can buy it back from your own insolvent estate.
You can make an arrangement with the liquidator to pay it off.
If you own a business, you can carry on with the business. Discuss with us how as each case has its own merits.
ELIMINATE DEBT AND STAY ON YOUR FEET:
As soon as you don't have to pay debt any longer, then you can start living a better life and start saving.
If you have your income all to yourself instead of having to pay it to creditors, you will recover sooner. Insolvency grants you this opportunity.
BUT WHAT WILL MY NEIGHBOURS THINK?
Frankly, it doesn't matter does it?
Sequestration does not have the stigma it had in the old days any longer.
More people realise the benefits of getting rid of their debt and starting over as soon as possible.
Every day that you do not use your money for yourself to better your own life but pay the money towards creditors, is one day less that you have to create wealth.
REPOSSESSION OF PROPERTY:
If the bank repossesses your property, it will be sold on an execution sale where the minimum prices will be fetched.
The bond will almost definitely not be settled and you will be liable for the balance for the next THIRTY YEARS.
You will therefore pay for something you don't have plus you will have to pay all your other debt.
It is therefore unlikely that you will recover.
If you sequestrate before the property is sold by the bank, you will be rid of the bank AND all other creditors.
DEBT SOLUTIONS:
Insolvency is the best solution to debt problems. The solution is to eliminate debt and to free yourself from your creditors and money problems.
INSOLVENCY ATTORNEY WHO REALLY CARES ABOUT YOUR FINANCIAL WEALTH:
We handle many many sequestration and liquidations applications successfully.
We really care about you. Over-indebted persons are being taken out of the economy to the detriment of all.
Insolvency is the leverage that you can use to keep yourself in the economy. The more people are active in the economy, our economy will grow. So, it is as important for you as it is for me that we assist you with the best possible advice to keep you on your feet.
PRINSLOO & ASSOCIATES SHALL GIVE YOU THE BEST ADVICE YOU NEED
We work holistically and therefore will give you the best advice you will need to really improve your life.
We look at your complete situation and make provision for your future, so that you can function economically independent at your best.
If you use our firm for your sequestration application, rest assured that we will hold your hand through the process to make it as easy for you as possible and we definitely will look after your best interests.
We will educate you in the sequestration/liquidation process and you can lean on us when you need advice.
You will have to look far and wide to get better service.
Insolvency is the leverage that you use to get out of a situation that would otherwise make it impossible for you to become debt free.
ONE FREE CONSULTATION:
During your free consultation (whether by phone, email or in person), we will tell you everything we know so that you can make an informed decision. If you decide not to go ahead, that is fine, but at least you can then make a better decision than you would have if you did not have the knowledge. We gladly pay forward our knowledge.
ASSISTANCE FOR PEOPLE IN BAD DEBT:
Our aim is to assist you through a difficult period, so that you are not only able to carry on with your life with the least inconvenience.
We also fully understand the psychological effect of debt. The fear, the worry, the feeling of failure, the shame, the guilt. These emotions are universal when it comes to not being able to pay one's debt.
We will show you why these emotions are not necessary when it comes to debt and that there are solutions.
INSOLVENCY - HOW DOES IT WORK?
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THE PROCESS OF SEQUESTRATION:
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A PROVISIONAL APPLICATION – a provisional order is granted
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B The matter is postponed for one month (return date) to allow creditors to oppose the application
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C On the return date, the Provisional Order is made final, the person is now sequestrated
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D Curator/Liquidator appointed by the Master of the Supreme Court (The Curator is tasked with selling the assets, paying the creditors and reporting to the Master
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E Creditors paid. Balances not recovered WRITTEN OFF.
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F NO MORE DEBT TO PAY
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SEQUESTRATION ADVANTAGES:
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R As soon as the provisional order is granted, all legal
actions and collections are suspended,bringing great
relief from phone calls and letters;
R The moment a person decides to sequestrate, she/he
stops paying all debt. to pay any further debt at this
stage would be throwing good money after
bad (immediately cash flow improves);
R As soon as the final order is granted a person is
sequestrated and is free from debt;
R A person can rehabilitate after four years and life
then gets back to normal, debt free.
R This enables him/her to start a new life to get back
on his/her feet without the burden of having to pay
off debt;
R You can stay in the property until the property is
sold, normally for 4 – 6 months(depending on the liquidator) without paying any debt;
R You can buy back your furniture (if it is fully paid)
and arrange to pay it off over a period of 6 - 9 months;
R As long as you control your assets, you can use
it to your benefit to get rid of ALL creditors.
R If you loose control to a creditor, the creditor sells
the assets to ITS OWN benefit only and all other debt
remain due. Sequestration avoids this problem.
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TWhere persons are married in community of property, one application is brought
TWhere persons are married out of community of property, and both persons are applying for sequestration, it would be two separate applications. However, we shall give a separate quote for instances such as these.
COSTS:
We will give you cost quote during our consultation or when you email us.
WE WORK NATIONALLY:
LIQUIDATION
(Close Corporation, Trust, Company Act(entity))
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A No assets are required for an entity to liquidate,
because:
B The Close Corporation Act, The Trust Act and the
Companies Act determine that an entity is not allowed to
trade if its liabilities exceeds its assets
C Therefore it is easy to liquidate an entity, there are less
formalities than for sequestration
D If a person has signed surety for the entity, he/she will
have to liquidate and sequestrate, as he/she would also
be personally liable for the debt of the entity under the
suretyships. (We don't always liquidate - we need
to discuss this with you first)
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WE WORK NATIONALLY.
You will find after a consultation with us that you feel empowered to make wise decisions, to negotiate better and to loose the fear and worry. Debt is nothing to be ashamed about. The New Credit Act, the recession and various other external matters have caused a financial slow-down for the South African economy. Do not take it personally. Rather admire yourself that you had the courage to take the risk, then empower yourself with the necessary knowledge so that you can put yourself in a better position and do better business in the future. We gladly assist you.
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