SEQUESTRATION IN TERMS OF THE INSOLVENCY ACT (ACT 24 OF 1936)

A sequestration application is an application that is made to the High Court of South Africa, where a debtor’s estate is surrendered to his / her creditors to be wound up. This means that assets and liabilities vest on an insolvent estate, that is placed in the hands of the Master of the High Court and after appointment of a Trustee, in such Trustee. The debtors estate is wound up according to the rules and regulations as contained in the insolvency act, act 24 of 1936.

The debtor is relieved from the obligation to pay his or her creditors and the creditor must claim from the insolvent estate. The insolvency of the debtor comes to an end once the debtor is rehabilitated.

What is the difference between Sequestration and Liquidation?

• If you are an individual and want to declare yourself insolvent, you need to file for sequestration.
• If you are applying for insolvency on behalf of a company or business, you will file for liquidation.