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How Does Bankruptcy work?

Bankruptcy is a legal process that provides immediate relief from the burden of debt. An assessment is conducted to determine which type of Sequestration or Bankruptcy application will work for you. 75% of your debt is written off and there are 2 ways of paying off the remaining 25%. You decide which will work best for you.

Bankruptcy provides immediate finanical relief from the burden of debt.

We conduct an Insolvency Assessment to determine which type of Sequestration or Bankruptcy solution will work for you.


There are 2 types of Sequestration:

1. Assets are used and converted to cash OR

2. A cash payment is made to settle your estate instead of converting assets to cash.


75% of your debt is written off in both cases. The 25% remaining can either be paid off over 18 months or in one cash lump sum payment. If you opt for paying the 25% off over 18 months, assets will stand as surety during that period.


How it works:

  • A court date is obtained for the process. It can take 3-6 months to obtain a court date depending on the time of year e.g. the courts close in December/January so applying towards the end of the year may lead to dates in February/March of the following year.

  • One month before the court date an advert is placed in the Government Gazette. This marks the start of the Bankruptcy process.

  • Once the advert is placed, legal action from Credit Providers as well as garnishee orders on salaries stop.

  • Once the court order is granted 75% of your debt is written off.

  • Thereafter a Trustee, who is appointed by the court, will distribute the 25% to all your Credit Providers prorate.

  • Once this process is completed you can apply for rehabilitation to become credit worthy again. It can take 24-48 months for this to occur.

  • Rehabilitation is a legal process which declares you solvent and credit worthy again.

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