F.A.Q - Rehabilitation

Rehabilitation is the end of the sequestration process whereby your sequestration period ends which effectively means that you are once again solvent and can effectively participate in the economy. It enables a person who has been sequestrated to make a fresh start, free from pre-sequestration debts. An Insolvent can Rehabilitate by way of a High Court application. You do not have to appear in person in Court.
Application can be made after 6 months of date of the Sequestration Order on condition that certain criteria are met, alternatively 4 Years after Sequestration Order. If an Insolvent do not apply during the first 10 Years, then he/she/they would be deemed to be Rehabilitated legally after 10 years.
Upon rehabilitation all judgements and negative reflections on your credit profile will be removed and no record shall exist of any of these, if these were incurred before your sequestration.

There are 5 circumstances where one qualifies for rehabilitation, as follows:

• Full payment of all proved claims from Creditors;
  At any time after confirmation by the Master of a plan of distribution providing for the payment in full of all proved claims with interest calculated in terms of the Act and all the costs of sequestration, the insolvent may apply for rehabilitation.
• No claims proved after six months;
• An insolvent can apply for rehabilitation after a time period of 6 months from date of sequestration if:
  • at the time of making the application, no claim has been lodged against the insolvent’s estate;
  • the insolvent has not been convicted of any fraudulent act in relation to their insolvency; and
  • the insolvent’s estate has not been sequestrated before.
• Lapse of the prescribed period of the first account An insolvent can apply for rehabilitation 12 months after the date of confirmation by the Master of the Liquidation & Distribution account in the estate. However,
  • If the insolvent’s estate has been previously sequestrated, then the above will only apply after three years; or
  • If the insolvent has been previously convicted of a fraudulent act in respect of their previous or current insolvency – then the above only applies after five years.
• Dividend to Creditors (Claims proved) of not less than 50 cents in the Rand; With a certificate from the Master stating that the creditors have accepted an offer of composition in which payment or security for payment has been made of not less than 50c in the Rand for every concurrent claim proved against the estate.
• Automatic rehabilitation after 10 years; An insolvent is automatically rehabilitated 10 years from date of sequestration of his/her/their estate. The 10-year period runs from date of provisional sequestration.

Upon the completion of our rehabilitation assessment form and its submission we will be able to advise you further if you do indeed qualify for rehabilitation at this time.
To do this we will need to correspond with your appointed Curator/Trustee who administered your insolvent estate to confirm if the Liquidation and Distribution account has been confirmed and if 1 year has lapsed from this date according to S124(2)(a) of the Insolvency Act.
In the event that there is no curator appointed or that there has not been any claims in your estate, S124(3) will apply and we will need to confirm this with the Master of the High Court as you may be permitted to rehabilitate within 6 months of date of sequestration should you qualify.
Once it is confirmed that you do indeed qualify for rehabilitation, we can begin working on your court application, at no point will you have to attend court.
A Notice of Motion asking the court for a rehabilitation of your estate along with a signed affidavit confirming your sequestration and current financial situation as well as the documents received from your curator are compiled and served on both the curator of your estate and the Master of the High Court who both have to evaluate the application and provide us each with a report on your estate and that they consent to your rehabilitation. To this we add an advertisement in the Government Gazette of our intention to apply for your rehabilitation which serves as a notice to all creditors.
These reports are attached to the original and set down before the court for its consideration, the court will look at the documents supplied by the curator and the affidavit to confirm that you as the applicant agree with the figures stated. A judge will too confirm if you have met the requirements of either section of the Insolvency Act as above.
If a judge is satisfied with the facts before him/her, a rehabilitation order will be granted.
This order is in turn sent to all credit bureaus by our offices to confirm the removal of all adverse reflections on your credit profile.
It must be noted that a curator may ask you to pay a contribution to your insolvent estate, this is an amount due for the claims that were instituted in your estate should there be any.
Our applications from start to finish take 7 weeks as by law the advertisement in the Government Gazette must be made at least 6 weeks prior to the hearing of your application.

No, when you are sequestrated, your debt vests in a trustee who must realise the assets and distribute the proceeds of the sale amongst creditors in accordance with the Insolvency Law Act 24 of 1936. None of your old creditors can force you to pay back the “old debt”.

No, if you have been sequestrated for 10 years, you rehabilitate automatically. In this instance you may approach the Master of the High Court for written confirmation. We can assist with this at an nominal fee. 

During the process of winding up your estate there might be a chance that there aren’t enough funds available to cover administrative costs of the winding up of your estate.
Should there be a shortfall in the funds available for the general administration of your Insolvent estate then each creditor who has proven a claim will become liable to pay a pro rata amount towards the administrative cost. The administrative costs that have been paid on your behalf will then be due by you when you bring your application for rehabilitation.

It has become practice that the Court would expect the Insolvent to pay back Contribution previously paid by the creditors. The Court would not grant the Rehabilitation order unless it is proved that it has been paid to the Curator for repayment to the creditors.

In practice, once your rehabilitation is granted, the Registrar of the High Court is responsible for providing a copy of your order to the necessary Credit bureaus and request them to update their systems with your information. Unfortunately, these institutions neglect their responsibility and fail to load the order on their systems.

We can assist by submitting and following up with the necessary bureaus on your behalf to save you time and frustrating calls to these institutions.