Rehabilitation after sequestration and insolvency rehabilitation by www.sebenzabiz.co.za
Rehabilitation after sequestration and insolvency rehabilitation by www.sebenzabiz.co.zaRehabilitation after sequestration and insolvency rehabilitation by www.sebenzabiz.co.zaRehabilitation after sequestration and insolvency rehabilitation by www.sebenzabiz.co.zaRehabilitation after sequestration and insolvency rehabilitation by www.sebenzabiz.co.zaRehabilitation after sequestration and insolvency rehabilitation by www.sebenzabiz.co.zaRehabilitation after sequestration and insolvency rehabilitation by www.sebenzabiz.co.zaRehabilitation after sequestration and insolvency rehabilitation by www.sebenzabiz.co.zaRehabilitation after sequestration and insolvency rehabilitation by www.sebenzabiz.co.za
Rehabilitation after sequestration and insolvency rehabilitation by www.sebenzabiz.co.za
Rehabilitation
 

How to apply for Rehabilitation
The effect of Rehabilitation
When will I be able to rehabilitate
How much does a rehabilitation cost?
The insolvency of a party comes to an end when he is rehabilitated. The insolvent is automatically rehabilitated within 10 years from the date of his sequestration. The insolvent may apply to Court within 10 years of his sequestration. He may apply immediately if there has been a composition of not less than 50c in the rand. In all other instances he may apply for rehabilitation of his estate:
1. If he has been sequestrated before, a period which must elapse
before he can apply for rehabilitation is 3 years from the date of
confirmation of the first account.
2. If he has been convicted of fraud 5 years have elapsed from the date
of his conviction.
3. The insolvent may obtain an order of rehabilitation within 4 years
provided that the master has recommended that he be rehabilitated.
4. If no claims are proved the insolvent may apply for rehabilitation after
6 months provided he has not been convicted of any fraudulent act in
relation to his insolvency and his estate has not been sequestrated
before.
5. Payment of all proved claims If the insolvent pays all proved claims
with interest after the confirmation by the Master of the plan of
distribution he may apply for rehabilitation.
How to apply for Rehabilitation

The insolvent must give 6 weeks’ notice of his intention to apply by advertisement in the government Gazette and by written notice to the master and his trustee. He must also provide security to the amount of R500.00 (five hundred Rand) for the payment of the costs of any opposition which the insolvent may be ordered to pay. A substantive application is then launched to the High Court of South Africa which is complicated and we do not intend to deal with the procedure and content of the application in this website. For further information please contact us.

The Effects Of Rehabilitation
Subject to the provisions of Subsection (3) and subject to such conditions as the Court may have imposed in granting a rehabilitation, the rehabilitation of an insolvent shall have the effect –
of putting an end to the sequestration; of discharging all debts of the insolvent, which were due, or the cause of which had arisen, before the sequestration, and which did not arise out of any fraud on his part; of relieving the insolvent of every disability resulting from the sequestration.

A rehabilitation granted on an application made in circumstances described in Subsection (3) of Section 124 shall have the effect of reinvesting the insolvent with his estate.

A rehabilitation shall not effect:

the rights of the trustee or creditors under a composition;

the powers or duties of the Master or the duties of the trustee in connection with a composition; the right of the trustee or creditors to any part of the insolvent’s estate which is vested in but has not yet been distributed by the trustee, but subject to the provisions of Subsection (2); the liability of a surety for the insolvent; the liability of any person to pay any penalty or suffer any punishment under any provision of this Act.

Note: the rehabilitation of an insolvent does not automatically re-invest him with his estate, save in one instance (Section 129(2) read with Section 124(3) – where an insolvent is rehabilitated under Section 124(3), ie. where no claims have been proved against his insolvent estate, the effect of his rehabilitation is to automatically re-invest him with his estate).

Thus property (excluding surplus money) of the insolvent estate vesting in the trustee and unrealised at the date of rehabilitation remains vested in the trustee for purposes of realisation and distribution. If, however, circumstances warrant, the Court in the exercise of its discretion under Section 127(2) may make an order for the reinvestment of such property in the insolvent. The insolvent has to make application for an order reinvesting his property in him. Surplus monies available for confirmation of the liquidating and distribution account is paid into the Guardian’s Fund and after rehabilitation it is paid to the Insolvent at his request. After twelve months have elapsed after confirmation by the Master of the first trustee’s account in the estate (provided the insolvent does not fall within the provisions of Section 124(2)(b) or

FAQs - Rehabilitation of an Insolvent Estate
Currently, Sebenza Business Solutions charge a fee of R7500 and disbursements, per rehabilitation application.

A deposit of at least R 1500 is required before any legal work is done. The balance will be payable in 2 monthly installments of

It is therefore important to fist establish whether in fact you qualify to apply for rehabilitation and we therefore suggest you look at the following question for the rehabilitation timetables:

When will I be able to rehabilitate?
FAQs - Rehabilitation of an Insolvent Estate
If your estate is sequestrated you may, subject to certain conditions, apply for your rehabilitation. If your application is successful (if you are rehabilitated), the court will declare that you are no longer an insolvent and that you are once more free to trade and contract.

The Rehabilitation of an Insolvent is regulated by Sections 124 and 127A of the Insolvency Act. Section 124 deals with rehabilitation application prior to the expiry of 10 years from date of sequestration and Section 127A deals with the automatic rehabilitation of an Insolvent after the expiry of 10 years since the date of Sequestration.

In order to assist clients in determining exactly when they will be entitled to apply for the rehabilitation of their insolvent estate, we have drafted a time table according to our interpretation of Sections 124 and 127A of the Insolvency Act.

At any time after Master issues a certificate in terms of Section 119(7)

Section 124(1) of the Insolvency Act states that an insolvent may apply for rehabilitation of his or her estate at any time after the Master issued a certificate in terms of Section 119(7) of the Insolvency Act. The certificate serves as confirmation that at least three-fourths () of creditors who proved claims against the insolvent estate, have accepted a composition for payment of:
A dividend of at least 50c in the Rand for all concurrent creditors who proved claims against the insolvent estate; and

If such dividends have not been paid, confirms that security for the payment thereof has been given. At any time Section 124(5) of the Insolvency Act states that an insolvent may apply for rehabilitation of his or her estate at any time after the Master confirmed a distribution plan providing for payment of:

1. All claims proved against the insolvent estate, in full; and
2. Interest thereon calculated from the date of sequestration in terms of Section 103(2) ; and
3. All the costs of sequestration.
6 Months after date of sequestration

Section 124(3) of the Insolvency Act states that an insolvent who was sequestrated for the first time may apply for rehabilitation of his or her estate after 6 months have lapsed from the date of sequestration of their estate, provided that:

At the time of making the application, no claim has been proved against the insolvent estate; and
They have not been convicted of any offences that would result in the application of Section 124(2)(c) of the Insolvency Act.
12 Months after Master confirmed the First Liquidation and Distribution Account
Section 124(2)(a) of the Insolvency Act states that an insolvent who was sequestrated for the first time may apply for rehabilitation of his or her estate after 12 months have lapsed from the date of confirmation by the Master of the trustee’s first liquidation and distribution account, provided that:
They have not been convicted of any offences that would result in the application of Section 124(2)(c) of the Insolvency Act; and
At least four years have expired from the date of sequestration, except upon the recommendation of the Master.
3 Years after Master confirmed the First Liquidation and Distribution Account, if previously sequestrated
Section 124(2)(b) of the Insolvency Act states that if an insolvent has been sequestrated previously, he or she may only apply for rehabilitation of their estate after three years have elapsed from the date of confirmation by the Master of the trustee’s first liquidation and distribution account, provided that:
They have not been convicted of any offences that would result in the application of Section 124(2)(c) of the Insolvency Act; and
At least four years have expired from the date of sequestration, except upon the recommendation of the Master.
5 Years after conviction of fraudulent act in relation to insolvency
Section 124(2)(c) of the Insolvency Act applies to any insolvent that was convicted of any fraudulent act in relation to his or her existing or any previous insolvency, or of any offence under Sections 132, 133 or 134 of the Act. Such an insolvent may only apply for rehabilitation after five years have elapsed from the date of conviction.
10 Years after date of sequestration - Automatically rehabilitated
Section 127A(1) of the Insolvency Act stipulates that any insolvent not rehabilitated by court application within 10 years from the date of their sequestration is deemed to be rehabilitated, unless a court orders otherwise upon the application of an interested person. Such an application must be made within the 10-year period.

The rehabilitation in terms of Section 127A(1) is automatic; there are no court procedures, applications or formalities.

Will I have to pay any of my debt once I rehabilitated?
FAQs - Rehabilitation of an Insolvent Estate
No. All debt incurred prior to your sequestration will be payable by you insolvent estate. Whatever portion of the debt that remains unpaid, will be written off as unrecoverable and will therefore not be payable by your rehabilitated estate.

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Rehabilitation after sequestration and insolvency rehabilitation by www.sebenzabiz.co.za