Sequestration Attorneys in Johannesburg
Personal Insolvency – Voluntary Surrender and Creditor Applications
Personal insolvency in South Africa is not defeat – it is a statutory process that freezes creditors, realises the estate, and discharges the honest debtor to start again. Handled properly, it ends the debt; handled badly, it ends in refusal or rehabilitation that never comes.
Our insolvency practice acts for debtors and creditors under the Insolvency Act 24 of 1936 – voluntary surrender, compulsory sequestration, and the rehabilitation that follows.
Book a Consultation
A member of the Otrebski team will respond soon
How Sequestration Works
Sequestration places an individual’s estate under a trustee: assets are realised, creditors prove claims in statutory order, and the insolvent is rehabilitated – restoring capacity – after the statutory period or court order.
The process and its consequences:
- voluntary surrender
- compulsory sequestration
- trustee realises the estate
- creditors ranked by statute
- rehabilitation restores capacity
Voluntary surrender requires the court to be satisfied of the debtor’s insolvency and that sequestration will advantage creditors – a factual test supported by a properly prepared statement of affairs. Compulsory sequestration is a creditor’s application on an act of insolvency.
The immediate effect is the moratorium: creditor actions against the estate stop. The lasting effect is the record – insolvency restricts credit, directorships and certain professions until rehabilitation, which is why the decision deserves legal advice, not desperation.
What a Sequestration Attorney Does
For debtors: testing whether sequestration or an alternative (debt review, arrangements) actually fits, preparing the statement of affairs and the application, and managing the process to rehabilitation.
For creditors: establishing acts of insolvency, the application itself, proving claims, and set-aside proceedings where assets were moved out of the estate before sequestration.
Sequestration is a tool with consequences for years. Advice first, application second.
Voluntary Surrender vs Compulsory Sequestration
Voluntary surrender
The debtor applies to place their own estate in sequestration, on a statement of affairs showing insolvency and advantage to creditors.
Timing, preparation and the advantage test decide the outcome – a well-prepared application succeeds; a desperate one is refused with costs.
Compulsory sequestration
A creditor proves an act of insolvency – a letter of non-committal, a failed execution sale, a disposition – and applies to court.
The creditor controls the timing and the trustee appointment in practice. Debters usually first meet sequestration on the wrong end of it.
| Issue | Voluntary | Compulsory |
|---|---|---|
| Who applies | The debtor | A creditor |
| Foundation | Insolvency + advantage to creditors | Act of insolvency + advantage |
| Timing control | The debtor’s | The creditor’s |
| Preparation burden | Statement of affairs, lodged and gazetted | Act-of-insolvency evidence |
| Typical outcome | Ordered surrender, rehabilitation path | Estate sequestrated on creditor’s terms |
The Sequestration Process, Step by Step
From application to rehabilitation.
Advice and alternatives
The attorney tests sequestration against debt review and arrangements – the right tool for the estate, not the most dramatic.
Preparation
Statement of affairs, asset schedule, and the advantage test – the documents the court decides on.
Lodgement and publication
The application is lodged with the Master, gazetted and published as the Act requires.
The hearing
The court grants a provisional order; the return day confirms sequestration.
Trustee and estate
The trustee realises assets, proves claims, and distributes in the statutory ranking.
Rehabilitation
Automatically after the statutory period, or by court application sooner – restoring full capacity.
Where Sequestration Runs
One division, one Master:
- High Court, Gauteng Division, Johannesburg – all sequestration applications, set-asides and rehabilitation orders.
- Master of the High Court – appoints trustees, administers estates and supervises realisations.
- National Credit Regulator route – the debt-review alternative – where it fits, it should be tried first.
Insolvency is High Court practice; procedure knowledge moves these matters.
How to Choose a Sequestration Attorney
Choose honesty about alternatives.
- Tests the alternatives..Debt review or arrangements sometimes serve better; counsel should say so when they do.
- Insolvency practice depth..The Act, the Master’s practice and trustee relationships are a specialisation.
- Advantage-test fluency..Refusals cluster on the advantage to creditors – ask how the application will satisfy it.
- Rehabilitation planning..The endgame is restored capacity; ask the route and the timeline at the start.
- Verifiable standing..Confirm good standing through the Legal Practice Council.
What Sequestration Costs
As a market guide, voluntary surrender applications commonly run R20,000–R50,000 including publication and the process to confirmation; opposed creditor applications from R40,000 per side. Trustee fees come from the estate under the tariff.
Otrebski Attorneys scopes insolvency work in phases and quotes in writing before work begins. Clients come before billable hours. No hidden costs.
Common Mistakes to Avoid
Insolvency mistakes last for years.
The Consequences That Outlast the Order
What insolvency restricts, and until when
From sequestration to rehabilitation, insolvency restricts credit, directorships and certain professions. Necessary tools of trade and basic household effects are protected within limits; the estate’s other assets vest in the trustee for realisation.
Rehabilitation runs commonly ten years automatically from the date of sequestration, sooner by court application on good cause. Planning the route and timeline at the start shortens it materially; left unmanaged, it stretches years longer.
Frequently Asked Questions
What is the difference between sequestration and liquidation?
Sequestration is personal insolvency for an individual’s estate; liquidation is the equivalent winding-up of a company. Both run under the Insolvency Act framework, with the Companies Act overlay for companies.
Will sequestration write off my debts?
On rehabilitation, remaining debts are effectively discharged. The process exists to benefit creditors, but its design – realisation then fresh start – is what restores the honest debtor.
What must I prove for voluntary surrender?
That you are insolvent, and that sequestration will be to the advantage of creditors – supported by a sworn statement of affairs, lodged and gazetted as the Act prescribes.
What is an act of insolvency?
A statutory indicator that a debtor cannot pay – a written admission, a letter of non-committal, a disposition, a failed execution sale. Creditors found compulsory applications on them.
How long does rehabilitation take?
The default periods run from the date of sequestration and depend on whether a first-time insolvent has a contribution order – commonly ten years automatically, or sooner by court application on good cause. Planning the application shortens it materially.
Can I keep anything through sequestration?
Necessary tools of trade and certain basic household effects are protected within limits; the estate’s other assets vest in the trustee for realisation.
Do you act for creditors too?
Yes. From its Sandton office the practice acts for debtors and creditors – applications, claim-proving and set-aside litigation – across Johannesburg.
End the debt properly – with the exit planned.
Otrebski Attorneys practises from Office 9th Floor, The Spaces, 5th Street, Sandhurst, Sandton – with transparent billing and no hidden costs.
Call 060 500 3098
Office hours: Monday to Friday, 08h00 – 17h00 · send a message
Image credits: Eternal Flame, Constitution Hill – Mihi tr via Wikimedia Commons, CC BY 4.0; Johannesburg skyline – Khaanya96 via Wikimedia Commons, CC BY-SA 4.0; Mandela Bridge, Braamfontein – South African Tourism via Wikimedia Commons, CC BY 2.0.