Sequestration is the act of voluntarily surrendering your financial affairs to the Master of the High Court in accordance with the Insolvency Act 24 of 1936.
This process involves an attorney and advocate working on behalf of the debtor to apply for sequestration in the High Court of South Africa. It is usually a last resort for those facing insurmountable debt due to circumstances beyond their control. If granted, the debtor (the applicant) can have up to 80% of their debt written off, providing much-needed relief.
Sequestration is available to those who have become insolvent, meaning their financial liabilities exceed their income. Once a debtor is granted sequestration, they are relieved of their obligation to pay their creditors as per the original creditor's agreement.
Creditors' claims are brought to a close once they have received their benefit from the insolvent estate. This process allows the debtor to obtain the legal status of Insolvent and enjoy the benefits of such a status.