What is Asset Sequestration?
Asset Sequestration is a High Court application that legally allows you to walk away from 75% of your debt. If you own assets then you can pay the 25% over a negotiated period after the court order is granted. Your assets stand as surety but still remain in your possession.
A Fresh Financial Start, Asset Sequestration allows you to legally let go of 75% of your debt
Asset 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.
When you are unable to service debt that has been handed over to collection agencies, interest and legal fee charges keep growing. The result is that you will not come out of this vicious cycle of debt and are unable to grow financially due to its overwhelming effect.
Your Credit Report is also cleared in 48 months. Unlike with Debt Review where is can take 60-84 months before your Credit Report is cleared.
Asset 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 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.
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You have a paid up vehicle. The vehicle can stand as surety for the 25% while you are paying it off over the 18 months.
How does Asset Sequestration Work?
Asset Sequestration allows you to make a fresh financial start by writing off 75% of your existing debt. The remaining 25% is paid off over 18 months using your assets which will stand as surety. Assets like paid up vehicles, household contents, electronics and tools of the trade can be used to stand as surety for the 25%. These items are not removed from your possession.
Asset Sequestration is a relatively Simple Solution to a Complex Problem
STEP 1:
A valuator will make a list of items that will stand as surety for the 25%. Once the 25% is paid off these items will no longer stand as surety. They will also not be removed from your possession, but you also may not sell them until the 25% is paid off over the 18 months.
STEP 2:
A Court Date is obtained immediately. A Government Gazette advert is placed, one month before the Court Date, notifying all credit providers of your intention to Sequestrate. The Credit Providers will also be notified by registered mail. At this point Credit Providers will no longer receive payment from you directly 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 are completely Debt Free. A Trustee is appointed by the court to distribute the 25% prorata to all the Credit Providers that put in a claim for the debt that you still owe. If a Credit Provider does not put in a claim at this point, the debt will be written off 100%.
STEP 4:
You will now be Debt Free and the income that was previously used to pay debt can now be put to better use like savings, pension, living expenses and unforeseen circumstances.
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 and become credit worthy after 10 years.
What does Asset Sequestration Cost?
There is an initial cost involved when you apply for Sequestration. This cost is necessary to start the process and is used for administration costs and to draft legal documentation. The remaining 25%, which is determined by your case, will be added to the Credit Providers benefit once the court order is granted.
Asset Sequestration Costs are low when compared to the fact that 75% of your Debt is Written off.
There is an initial cost to start Asset Sequestration. Thereafter the 25% is paid off over 18 months.
INITIATION FEE FOR ASSET SEQUESTRATION:
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Appointment with a Consultant to discuss the process.
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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 ASSET 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
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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.
Benefits of Asset Sequestration?
Legal debt, that consumers struggle to pay back, will grow due to interest charges and legal fee costs. This locks you into a vicious cycle of debt that will take years to pay off. Your life feels stuck and you cannot seem to move forward. Asset Sequestration gives you the opportunity to break away from the stress of that debt and to start again on a clean slate.
Asset Sequestration Advantages outway the Disadvantages by far
The main benefit of a Asset Sequestration is to become debt-free. All original contractual agreements with Credit Providers and/or payment arrangements with debt counsellors / collection agencies come to an end. Emolument attachments (garnishee orders) are removed from your salary.
HERE ARE THE OTHER BENEFITS OF ASSET 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.
Qualifying Criteria Asset Sequestration?
Asset Sequestration is available to anyone carrying the burden of legal or unpaid debt. It is particularly useful if you have a large amount of unsecured debt that has been handed over to collection agencies or when judgement has been obtained against you for that debt.
Asset Sequestration is available to anyone experiencing financial difficulties
Important factors to consider when applying for Asset Sequestration.
MINIMUM REQUIREMENTS:
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If Married in Community of Property your Spouse must be included in the process. There are no exceptions.
- You can apply if you are currently under Debt Review.
- You can apply if you are Non-Credit Worthy i.e. have judgements or adverse listings on your credit report.
- You can apply if you have garnishee orders on your income.
- You can apply if you have SARS penalties
- You can apply if you have Medical Debt.
- You cannot apply if a Credit Provider can show proof that you used the debt for gambling purposes.
- 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.
- 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.
- You can apply if you have a paid up vehicle. You can keep your paid up vehicle.
