The Timeline of Sequestration Rehabilitation

Have you ever wondered how long sequestration rehabilitation takes? This depends on the circumstances under which you were sequestrated, the High Court’s schedule, and whether anyone objects to your rehabilitation application. Assuming the process goes smoothly (no one objects, you get a court date quickly, etc.), you’ll be officially solvent again four years and three months after the date you’re sequestrated.

This post describes how long you can expect to wait before you can apply for a rehabilitation order after you’re sequestrated and the timeline of how long a rehabilitation order takes.

Qualifying Criteria for Rehabilitation and Waiting Periods

Whether you qualify to be rehabilitated depends on how long has passed since the date of your provisional sequestration, whether you’ve been previously sequestered, whether you’ve committed a crime (such as an act of insolvency), and whether creditors have lodged claims against your estate.

A provisional sequestration is when you’re temporarily declared insolvent before the court has the full facts to motion a sequestration order. This is so you can argue against sequestration (if involuntary), and your creditors can present a case against you and submit provisional claims.

Generally – Four Years

Generally, you can apply for rehabilitation once you can pay 50 cents of every Rand you owe your creditors. So, if you can cover at least half of your debts, you’re eligible for a rehabilitation order.

You can also apply to be sequestered if no creditor has lodged a claim against your estate six months after the date of the order, and you haven’t been convicted of a fraudulent act. Lastly, you can apply for rehabilitation once you’ve paid off all claims against you.

If You’ve Commited a Crime – Five Years

If you’ve committed a crime like fraud or applying for a credit while hiding the fact that you’ve been sequestrated, you must wait five years to apply for sequestrated from the date the provisional sequestration was granted. You must also wait five years if you have committed acts of insolvency, including:

• Leaving South Africa or your domicile address without leaving a forwarding address and ceasing payment to creditors.
• Written acknowledgement of the total amount of debt and that you cannot pay the debt.
• A written request to a creditor requesting that your debt be written off because of your inability to pay.
• Failure to satisfy a judgment against you because you couldn’t pay.
• Having sold assets to pay off specific debts

This may lengthen the process and make sequestration more costly. If you have any doubts about whether you’ve committed an offence or act of insolvency, contact Credit Rehab.

If You’ve Been Sequestered Before – Four Years

If you’ve declared bankruptcy or been declared insolvent before, you must wait four years from the date your official sequestration order was granted, as long as three years have passed since your curator submitted the first liquidation and distribution account. This must be confirmed by the Master of the Court.

When There Are No Claims Against Your Estate – Six Months

If your estate is small, creditors might refrain from applying to liquidate it, purely for the administrative costs. If your debts are too small to justify your creditors paying fees and they decide not to lodge claims against your estate, you can apply for rehabilitation six months after sequestration.

All in all, the time you have to wait to apply for rehabilitation from the date of your order depends on whether you’ve committed an offence, paid off your claims, or been sequestered before.

A General Timeline for Rehabilitation Orders

We comprehensively covered how rehabilitation after sequestration works in our previous post. This timeline assumes there are no waits or hiccups in the process.

Notice to Gazette and Officials – 6 Weeks

After the period you must wait before you can apply for rehabilitation passes, plan a notice to the Government Gazette. You must submit this notice at least six weeks before you plan to rehabilitate.

You must also provide notice to the Master of the High Court and your Trustee. If your Trustee feels you’re fit to be solvent again, they’ll issue an affidavit saying so. Then, you’ll obtain a court date.

Court Date – a Month

Usually, you must wait at least one month to get a High Court date, though this varies by how busy the Court roll is and can take up to six or more months. Let’s assume you wait a month for a court date.

Approval and Credit Clearance – Three Weeks

If your rehabilitation application is approved, you can submit the order to the credit bureaus to clear your credit record. They must clear your credit record within 21 days. You’ll be able to begin applying for credit again and act as director of a company.

All in all, assuming everything goes perfectly, sequestration rehabilitation could take about as little as just over three months (without accounting for your waiting period).

Let Us Rehabilitate You

Credit Rehab’s team are experts in the rehabilitation after sequestration/personal liquidation process. We’ll help you gather the relevant documents, submit your notice to the Government Gazette and officials, and represent you in High Court when the time comes.

Let us help you become solvent again and regain financial agency. Contact Credit Rehab today.