Sequestration while under debt review – Illegal?

Can you be Sequestrated while under Debt Review?


The National Credit Amendment Act says clearly that it is not an act of insolvency to go under debt review. However this has not always been the understanding by some parties and the NNCA2014 has not yet come into effect. So the question remains can a person be put into sequestration by a creditor when they apply for debt review (at present). Well, it has happened. In the case of Mrs Oberholster this matter has now come to the media’s attention and is climbing to higher and higher courts.

ABSA vs Mrs Oberholster

What happened is Mrs Oberholster went under debt review in 2012 and then ABSA went and took legal action against her anyway (even though she had been paying R12 000 each month on her bond). They first got a default judgment against Mrs Obeholster (despite the payments and debt review) and then later they then had agents of theirs get a sequestration order (in 2013) which was granted.


Recently agents of ABSA showed up at the Ooberholster’s home and began to try take assets etc. The problem is that only a sheriff was allowed to do so (not ABSA’s agents KPMG) and infact even then the sheriff would only have been able to list items that belonged to Mrs Oberholster and not other persons living on the property or storing goods at the property. Mrs Oberholster (60yrs old) who was sick in bed at the time had already appealed to the Constitutional Court about the matter and thus ABSA’s agents were not meant to take further legal action until the court case is resolved. It seems they were impatient and just went ahead. This upset the Oberholsters who are now supposedly intent on sueing ABSA and Agents for 10 Million Rand. Ouch.

Constitutional Court Case

Regarding the matter before the Constitutional Court Mrs Obeholster says: “My argument to the Constitutional Court is simple. I went under debt review, the purpose of which is to allow creditors to reschedule their debts and I complied with every step of the debt review process – yet, the bank still went ahead and sequestrated me. I want the Court to issue a ruling on the legality of this, so that thousands of other South Africans in the same position can also hopefully benefit.”

Since the matter hit the press it seems that (according to Mrs Oberholster and her attorneys) that KPMG are now grovelling and begging for forgiveness. It seems they will not receive any forgiveness. In fact, Mrs Oberholster has now increased her claim for legal damages to R12 million.

ABSA did have a court order (right or wrong) but the entire matter is fraught with various issues like: why other people besides the Sheriff came onto the property, Why did they try remove goods if the warrant was only to make a list of goods, who actually signed the warrant and why did they proceed with legal action and enforcement when the matter was before the constitutional court?

A Waste of Time?

When the National Credit Amendment Act takes effect later this year then the matter will be resolved so this whole court battle at the constitutional court may be moot by the time it is heard and the matter will probably be settled out of court one way or another but it is interesting to see how some creditors have ignored the debt review process and have misunderstood the debt review process in the past and how it is now biting them years later.


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