This is for consumers who either do not have enough equity (funding or capital) to sequestrate their estate and who choose to rather keep their assets and pay off their debt. Both are a type of debt consolidation in that both consolidate the consumers various monthly instalments into one instalment and is based primarily on the affordability of the consumer.
Debt mediation is a voluntary process and payments are made to the consumers creditors by our attorney firm (all monies are safely deposited into the attorney trust account which is monitored and audited by registered auditors). The consumer is also legally represented should a creditor wish to proceed against the consumer for the recovery of the debt. Debt mediation is a voluntary process and although it does not get listed on the credit bureaux, it does not result in any binding court order against the creditor.
Statutory debt review is a process which gives the consumer more protection in that a court order is ultimately obtained, which indirectly forces a creditor to accept the reasonable payments that have been proposed by the debt counsellor. It is also beneficial in that it usually allows for the reduction of contractual interest rates that is due to the creditor, and this gives the consumers an enormous advantage to get out of debt as soon as possible.
Please contact us for further information or complete our assessment form so that we can assess your situation and advise you accordingly.
There are two types of sequestrations, the one being a voluntary surrender of your estate and the other a forced application by a creditor. The voluntary sequestration of your estate can be done whether or not you have assets. If there are assets in the estate, this will be sold in order to pay creditors and where there are no assets in the estate, you would have to come up with a cash amount to pay the creditors. The amount to be offered to your creditors differs slightly between the various provinces and in the Western Cape an average amount to be paid to creditors would be 20 cents in the Rand. As an example, if you have debt of R100,000.00 this would mean that you would have to offer at least R20 000.00 to have your debt extinguished and the costs involved in an application for sequestration would be approximately R15,000.00 (this would include expenses like advertising and your advocate who will appear for you in the High Court).
A liquidation refers to a company or so-called ‘juristic person’ and not to individual consumers. This is when a company is ‘bankrupt’ and the company itself or a creditor of a company can apply for the liquidation of the company.
After a consumer’s estate has been sequestrated, a general period of at least 4 years must lapse before a consumer can apply for his or her estate to be rehabilitated. This would be necessary where, for instance, the consumer wishes to purchase immovable property. The application is not a complicated process and all the necessary facts will be placed before the court on application for the court to grant the order. Once this order is granted, the credit bureaux is notified to remove the sequestration status from the name of the consumer and the consumer may re-enter the credit market with a clear record.
Every consumer has the right to economic freedom and to have his or her name and record cleared where it has been adversely effected by a Judgment, Debt Review Order, Administration Order and the like. Sometimes this would involve a court application to ask the court to set aside the previous order that was made, or to declare the consumer not over-indebted, but sometimes it may not be necessary to approach the court and the consumers name can be cleared from the credit bureaux by other legal means.