Benefits of Voluntary Sequestration?
The main benefit of a Voluntary Sequestration is to become debt-free. All original contractual agreements with Credit Providers and/or payment arrangements with Debt Counsellors / collection agencies will come to an end. Emolument attachments (garnishee orders) and loan payroll deductions are removed from your salary.
The Pros outway the Cons of Voluntary Sequestration
HERE ARE THE OTHER BENEFITS OF VOLUNTARY SEQUESTRATION:
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75% of your debt is written off.
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More money monthly for savings, pension, living expenses.
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Non-Credit Worthy Consumers can apply.
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Clients that are currently under Debt Review can apply.
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Unlike Debt Review the following debt can also be included - Judgements, Adverse listings, Shortfalls from repossessed assets, penalties from SARS, Medical Debt etc. Discuss other debt that you have with a consultant to find out if that debt can be included too.
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No more interest charges on outstanding debt.
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Credit Providers can no longer request payment directly from you. Credit Providers can only put in claims to the Trustee/Curator.
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Credit Worthy in 48 months.
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You will be allocated a new tax number by SARS. i.e. Fresh Start.
What is Voluntary Sequestration?
Voluntary Sequestration is a High Court application that legally allows you to walk away from 75% of your debt. The remaining 25% is paid off over 18 months.
Pay off 25% of your debt over 18 months.
Voluntary Sequestration legally writes off 75% Debt.
Voluntary Sequestration allows you to make a fresh financial start, giving you the opportunity to put money away towards your future instead of wasting it on debt that has been handed over to attorneys - due to unforeseen circumstances - and growing in interest and legal fee charges.
Your credit report is also cleared in 48 months. Unlike Debt Review which can take 60-84 months before your credit report can be cleared.
Voluntary Sequestration is perfect if the following applies to you:
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You have tried Debt Review and were unable to keep up with the payments or are currently finding that the lower installment under Debt Review is still not assisting enough financially each month.
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Your debt and expenses exceed your income.
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You have shortfalls on assets that have been repossessed, like Vehicles and Home Loans.
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Credit Providers have obtained Judgements against you.
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You have an emolument attachment (garnishee order) on your salary each month.
How does Voluntary Sequestration Work?
When life happens and debt becomes unmanageable, Voluntary Sequestration allows you to make a fresh financial start. This is a high court application that writes off 75% of your debt. The rest is paid off over 18 Months.
Voluntary Sequestration allows you to make a fresh financial start when debt has become a burden.
STEP 1:
The initial Fee is paid. The installment over 18 Months only starts once the court date is obtained.
STEP 2:
A Court Date is obtained as soon as the initial fee is paid. A Government Gazette advert is placed one month before the Court Date notifying all credit providers of your intention to Voluntary Sequestration Your Estate. The Credit Providers will also be notified by registered mail. At this point Credit Providers can no longer receive payment from you and all payment arrangements/installments to Credit Providers should cease.
STEP 3:
It will not be necessary for you to appear in Court. Once the Court Order is granted you will start paying your monthly installment for the 25%. A Trustee is appointed by the Court to distribute the installment pro rata over the next 18 months. If a Credit Provider does not put in a claim at this point, the debt will be written off 100%.
STEP 4:
After 18 Months you will be debt free.
STEP 5:
You can apply for Rehabilitation 48 months after your granted Court Order. Rehabilitation clears your credit report of all adverse listings, late payments, and judgements and you are credit worthy again. If you decide not the apply for rehabilitation you automatically qualify by law and become credit worthy again after 10 years.
What does Voluntary Sequestration Cost?
There is an initial cost to start Voluntary Sequestration. Once paid and the court order granted, 75% of your debt is written off.
Thereafter the 25% remaining is paid off over 18 Months.
When you consider that 75% of your debt is written off, the costs for Voluntary Sequestration are incredibly low.
INITIATION FEE FOR VOLUNTARY SEQUESTRATION:
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Appointment with a Consultant to discuss the process.
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To appoint a valuator to assess your Estate.
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To place the Government Gazette advert
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To send registered letters to Credit Providers
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To draft documentation
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To communicate with Credit Providers on your behalf
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General Administrative Costs
ESTATE FEE FOR VOLUNTARY SEQUESTRATION:
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To appoint an Advocate to appear in court on your behalf
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To appoint a Trustee to distribute the 25% to Credit Providers over 18 months.
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Court Fees
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To pay Credit Providers a percentage of your estate fee for outstanding debt. The rest of your debt is written off.
Qualifying Criteria Voluntary Sequestration?
There are various Qualifying Criteria for Voluntary Sequestration. Fortunately none include being non-credit worthy. If you are struggling to repay debt, are not credit worthy or have debt that has been handed to attorneys, you will still qualify for this solution.
Important criteria when applying for Voluntary Sequestration
MINIMUM REQUIREMENTS FOR VOLUNTARY SEQUESTRATION:
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If Married in Community of Property your Spouse must be included in the process. There are no exceptions.
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You can apply if you are currently under Debt Review.
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You can apply if you are Non-Credit Worthy i.e. have judgements or adverse listings on your credit report.
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You can apply if you have garnishee orders on your income.
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You can apply if you have SARS penalties
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You can apply if you have Medical Debt.
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You cannot apply if a Credit Provider can show proof that you used the debt for gambling purposes.
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You cannot apply if you have an existing Bond. Your home must first be sold/transferred or must have already been repossessed before you can apply.
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You cannot apply if you have a financed vehicle that you want to keep. The vehicle must be handed back to the bank, transferred to another owner or have already been repossessed by the bank before you can apply.
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You can apply if you have a paid up vehicle. You can keep your paid up vehicle.
