If you have debt, then you may be worried about sequestration. This is a process where a person’s assets are handed over to a trustee in order for them to be sold and distributed among the creditors who are owed money by the debtor. The person’s assets can include anything from personal possessions like furniture or vehicles to property such as land or houses.
Procedure
- The creditor must apply to the court for an order of sequestration.
- The creditor must prove that the debtor is insolvent.
- The court will issue an order of sequestration.
- They will serve the order of sequestration on the debtor, who has twenty days in which to lodge any objections with the court.
What assets will be sequestrated?
Sequestration will apply to all assets and property of the debtor, including all movable and immovable property. This includes, for example:
- All debts owed to you by clients
- Money held in bank accounts (or other financial institutions) in your name and any money you may be holding on behalf of others
- Shares held by you
Purpose of the sequestration
With sequestration, the purpose is to protect the assets of the debtor and ensure that his/her creditors are paid. The sequestrator (an independent person appointed by a court) has powers that go beyond those given to him by law. He can prevent a debtor from wasting his/her assets, sell them if necessary, and use any proceeds from such sales for paying off debts. He may also seize other property belonging to you to pay your creditors.
Hence, if you are in debt or facing financial difficulties and trying to avoid bankruptcy, then it might be better for you not to waste your funds but keep them safe until such time that all your debts have been settled or paid off completely.
Who can apply for sequestration against debtors?
A creditor can apply for sequestration against a debtor. A creditor is someone who is owed money by the debtor. The creditor must be able to prove that the debtor owes them money and that they have incurred damages because of this debt.
Does the debtor have a right to oppose the claim?
If a debtor opposes the claim, the case will be heard in court and the court will make an order. If a creditor has already obtained judgment and wants to enforce it before the date of payment, he or she can ask a magistrate to grant an order that requires someone who owes money to pay what they owe. The person who owes money has no right to object to this kind of order unless there are special circumstances which justify objections.
