Sequestration is surrendering your estate to a trustee who sells your assets and distributes to creditors. Voluntary surrender is initiated by the debtor; compulsory sequestration by a creditor who can prove an 'act of insolvency'. Rehabilitation (typically 4 years after sequestration) clears remaining debt. Sequestration has serious consequences: you lose financial control, cannot be a company director, and your name is published in the Government Gazette.
When to hire a sequestration & insolvency attorney
- Your debts are unmanageable and debt review won't fix it.
- A creditor has served you with a sequestration application.
- You want to challenge a compulsory sequestration.
- You need to apply for rehabilitation after the statutory period.
- You want to apply for a Section 74 administration order instead.
What to expect
Voluntary surrender requires a publication in the Gazette and 2 newspapers, 21-day statutory waiting period, a meeting of creditors, and a court application showing the estate is 'to the advantage of creditors'. Compulsory sequestration requires proof of an act of insolvency (e.g., notice of inability to pay). A trustee is appointed who takes control of all assets.
Typical fees
Voluntary surrender application: R25,000-R80,000 including publication costs. Defending a compulsory: R20,000-R100,000+. Rehabilitation: R15,000-R40,000.
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