Are you considering leaving South Africa for pastures anew? As we struggle through various problems the country is facing, many people are considering starting a new life in a different country. The wise thing to do is to wind up your affairs in South Africa before you leave so that your bridges are not burned. There is a lot to deal with and the way forward may seem overwhelming. With guidance, the issues can be tackled one by one and you can then rest assured that your affairs are in order.
If you are not able to settle your affairs you may need to consider liquidation or sequestration in South Africa. Here are some of the situations you may be faced with:
Cancelling contracts, for example, cell phones
Any contract such as cell phone contracts or a lease agreement when locked in for a period: In the consumer protection act, if you are a consumer (as opposed to a commercial lease when both parties are companies which do not fall under the consumer protection act) you are fixed for a term. There is a way out of the contract. It is permissible to give, for example, 20 days notice to cancel the contract but note that the provider is entitled to a reasonable cancellation fee.
The Consumer Protection Act (CPA) does not define the word reasonable which can encourage the provider to give a very high settlement. If it is worth fighting the settlement the matter must be referred to their complaints department and then to the consumer protector. This battle could take months so, well, pick your battles! In theory, the consumer is protected but in actual fact, the consequences of enforcing the act can be difficult and does not always work for the consumer. Consequences of not paying the cancellation fee are that you will be sued for the full period. It is often cheaper to pay the settlement quoted.
Cancelling rental contracts, for example, you have rented a house
In the case that you have rented a house and you need to be released from the contract quickly: Depending on the contract wording nothing stops you from giving notice of cancellation of 20 days. The landlord is entitled to a cancellation fee. If you have a clean credit record and want to leave the country with no problems, make an agreement with the landlord and find another tenant.
As soon as you cancel the agreement, the contract is canceled, whether done lawfully or not. At this point the only thing the landlord is entitled to is damages and he must be able to prove his damages. Damages are, for example, the property has been standing empty for a period (during your original lease agreement) he can claim damages, not rent. The case for damages must be proven in court. If the case cannot be settled amicably. Damages cannot be claimed if a new tenant has been found.
If you are the owner of a property and wish to sell the property you will have to find an agent and give power of attorney to your attorney to sign on your behalf.
How to deal with employees if you are leaving the country
Ensure that you have paid UIF to all employees so that there is no comeback after you have left South Africa. All other contracts such as garden services must be dealt with.
Cancelling vehicle contracts when departing South Africa
Any vehicle can be sold for the same amount (or more) as the outstanding balance and the creditor must be paid. Any profit can be pocketed.
Closing your business in the correct way if you are leaving South Africa
If you want to close your business it is possible to de-register the business providing all taxes are paid to SARS and there is no debt. In case there is outstanding debt, the business must be liquidated (this is one of our specialties and we can help). Assuming you have signed security for any debt of the company, depending on how much, do not liquidate but rather sequestrate.
If you are planning never to return to South Africa sequestration may not be your first choice as it will be expensive for the authorities to track you once you have left. However, there is a caveat, things don’t always go as expected or as planned so burning bridges is not always a good choice.
If you plan to leave for good but would like to leave a clean credit record you should consider sequestration otherwise the debt will sit with you for 30 years as opposed to 4 years. Note that sequestration does not affect your immigration chances or permanent resident status in another country because insolvent in one country does not mean insolvent in another country.
Debt is a civil matter and other countries are not concerned with your debt. If there is a judgment against your name the judgment stands for 30 years or until the debt is paid. If you are sequestrated it stands for 4 years then falls away and does not need to be paid.
What happens if you leave South Africa and discover debts once you have left but cannot pay off the debts? We can help sequestrate you because we get special permission from the High Court so that documents can be served on you via email. So far the court has always allowed and we have never had a problem.
In conclusion, do your best to clean up before you depart and we can help if necessary. If you have a problem once you have left the country contact us and we will take care of your affairs.
Nanika Prinsloo, Attorney