Directorship/Member/Trustee after sequestration

[hf0157]

I sense a snooker coming, so may I cover this from my original POV (which certainly has little to do with the legal subtleties in this instance)

No snooker Dave :-) Just confusion.
Follow me here:
An insolvent can (1), apply for a discharge after six months if all creditors have been satisfied with 100 cents on the Rand and absent fraud. (creditors' satisfaction)
Can also (2), apply for discharge after 4 years if creditors have been partially satisfied with the assets of the estate as of the sequestration date (presumable to the court's satisfaction)
By operation of law/statute (3), after 10 years. (court's satisfaction?)

Many "sequestration counseling" websites have various advice on voluntary sequestration, but all generally espouses to wit:

"

The court will grant voluntary sequestrations to customer. The court will appoint an Administrator or Trustee who will be in control of your estate. The customer will surrender all assets to administrator. All assets will be sold by Administrator. Cost will be subtracted and the rest will be divided between all creditors. Any balance left on the account of the customer will be written off by creditor. Creditor may not pursue customer anymore.

This is the biggest advantages of sequestration. The customer will come out clean with no debt at the end of the process. The customer will have a clean start in live. No creditor or debt collector may call you for outstanding money again. For many people this is a great option to get rid of all the creditor calls and sleepless nights from worrying about your debt.

It seems that on the one hand, the law pegs the assets and liabilities of the insolvent at a certain amount and at a certain time (sequestration date), but on the other hand, allows the trustee to continue collecting debt for his and the creditors' benefit for up to ten years from assets accumulated subsequent to the sequestration date outside of the bankrupt estate.

This would then surely be unlawful ?

You statement about a sole proprietorship or partnership in your comment makes 100% sense and is as good as it gets......... on the one hand (no snooker here) :-)

The question arises: "What then, absent fraud, is the point of voluntary sequestration?

Pray tell; What thinkest thou?

[Dave A]

The question arises: "What then, absent fraud, is the point of voluntary sequestration?

We are talking voluntary here, and personal estate I assume. When it comes to juristic persons, the matter isn't nearly as complex.



You have to balance the fact that you're walking away from not only all your debt, but also everything you've got. Plus the handicaps that go with being classified an unrehabilitated insolvent going forward for a while.

The psychological side of this isn't that simple either. Yes, there is a refreshing simplicity in new starts, but I wouldn't underestimate the damage to the psyche caused by the sense of failure. It takes a concerted effort to pick yourself up and get going again - and quite a while to regain any sense of confidence in yourself.

I'd suggest when you know you've lost control of the situation. When you can see that big bus coming and you just know it's going to smash you up when it finally gets to you and this is the only way to stop it. Up to that point, I'd fight to keep head above water with all the energy I could muster.

[Taxempt]

Good day Anthony,

If I understand correctly Disqualification to act as a director is a court action. Does it then also apply to MEMBERS of close corporations?