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Application for rehabilitation by insolvents

An insolvent is a debtor whose estate (everything, including money, that a person owns) is under sequestration (has been placed under control until certain statutory provided time periods and/or prescribed conditions have been met). If you are married in community of property and your spouse becomes insolvent, the Insolvency Act, 1936, considers you to be insolvent as well in light of the fact that there is only one joint estate.

If an insolvent wants to be rehabilitated (no longer insolvent) within ten years of having been declared insolvent, he or she can apply to court for rehabilitation.

Who can apply for rehabilitation?

  • The insolvent himself or herself
  • The insolvent’s duly authorised agent, if the insolvent does not live in South Africa
  • The widow or widower of an insolvent, if they were married in community of property
  • The former spouse of an insolvent, if they were married in community of property
  • The executors of the deceased estate of an insolvent

How soon after having been sequestrated can an insolvent apply for rehabilitation?

  • At any time:-
    • as soon as all creditors' claims and sequestration costs have been paid in full; or
    • if the insolvent has made an offer of composition that was accepted by three quarters of his or her creditors in number and value, and the insolvent has either made payment or given security.
  • After six months:-
    • if, within these six months, no claims have been proved against the insolvent’s estate; and on condition that;
    • this was the first time that the insolvent had been sequestrated; and
    • the insolvent had not been convicted of certain offences.
  • After twelve months:-
    • from the date of the Master's confirmation of the first trustee's account in the estate; and on condition that;
    • this was the first time that the insolvent had been sequestrated; and
    • the insolvent had not been convicted of certain offences.
  • After three years:-
    • from the date of the Master's confirmation of the first trustee's account in the estate; if;
    • the insolvent had already been sequestrated more than once; but on condition that
    • the insolvent had not been convicted of certain offences.
  • After five years:-
    • in the case of an insolvent who had been convicted of certain offences.
  • After ten years:-
    • the insolvent shall be considered rehabilitated – unless, within ten years of the court having declared someone insolvent, an interested person applies to the court not to rehabilitate the insolvent, and this application is granted.

Follow this link for more information: http://www.justice.gov.za/master/liquidations.htm

Steps to follow

Contact an attorney or the office of the Master for more information and assistance.

Legal framework

The Insolvency Act, 1936 (Act 24 of 1936); (as amended) is available on this page: http://www.justice.gov.za/legislation/acts/acts_full.html

Service standard

Discuss the time frame for the application with your attorney.

Cost

Discuss the cost with your attorney.

Forms to complete

There are no forms to complete.

Contact details

Contact details for the Master of the High Court Offices can be found on this page: http://www.justice.gov.za/master/contacts.htm

Master of the High Court, National Office: Customer Care
Tel: 012 - 406 4805
Fax: 086 544 4893
Email: Chiefmaster@justice.gov.za
Postal Address: Private Bag X81, Pretoria , 0001
Physical Address: 22nd Floor,SALU Building, 316 Thabo Sehume Street, Pretoria

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Updated: 2012/08/14