In the day and age of constant and rapid economic ups and downs, the possibility of insolvency is high, especially in light of recent global events. The insolvency process is legislated but has some specific practices which need to be followed for compliance for successful insolvency. The following are some of the considerations.
Who may apply:
According to the Insolvency Act 24 of 1936 (the “Act”) in its s 3(1), the debtor himself or his agent may apply and in the case of his or her agent applying such agent must have the necessary authority to do so (Ex Parte Brown 1951), the executor of a deceased estate may also in terms of the same section apply, the curator bonis in charge of administering the estate (Ex Parte Houston 1958), all members of a partnership other than partners en commandite (this is a partnership where certain names of the partners are not disclosed – they are known as en commandite partners), in terms of s 3(2) of the Act. Furthermore, in terms of the joint estate of spouses married in community of property both spouses in terms of s 17(4) of the Matrimonial Property Act 88 of 1984.
The requirements for the court to accept the surrender of debt as a state or that the estate must be insolvent, sequestration will be to the advantage of creditors in terms of s 6(1) of the Act, and the debtor owns a realisable property of sufficient value to defray all costs of the sequestration which will in terms of the act be payable out of the free residue of his estate also in terms of s 6(1) of the Act.
Formalities include the debtor needing to give notice of his surrender by publishing it in the Government Gazette and in a newspaper circulating the area where he resides – this requirement contains more specific detail which your attorney can advise you about. Secondly, notice is to be given to creditors and other parties within seven days after publication of a notice of surrender where compliance with this must be proved through an affidavit made by the debtor or his attorney. Thirdly, the statement of affairs referred to in the notice of surrender must be done in accordance with certain sub formalities.
The above touches on some of the aspects and has more detail, as mentioned. Thankfully the process is regulated through case law and legislation which helps make it more streamlined.
Should you require any assistance, do not hesitate to contact us.