What is a Sequestration? “Sequestration” refers to the legal process of surrendering an individual’s estate and financial affairs to the High Court when such an individual’s liabilities exceed his/her assets and, as a result, they cannot pay their debts to creditors.
Sequestration is governed by the Insolvency Act (Act 24 of 1936) and can be either “voluntary” or “compulsory”. Voluntary sequestration refers to a situation when the insolvent individual willingly makes application to Court to be sequestrated. Compulsory sequestration, on the other hand, refers to a situation when an individual’s creditor(s), as a result of that individual not being able to pay his/her debts, applies to Court to have that individual sequestrated.
An Application for Sequestration is launched in the High Court by an attorney, either on behalf of the individual (in Voluntary Sequestration) or on behalf of the individual’s creditor(s) (in Compulsory Sequestration), and with the assistance of an Advocate.