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What is the effect of sequestration on a person once he/she is sequestrated?  What can or can’t he/she do? What about income and assets and in general, how does sequestration affect a person’s life?  This article will set out briefly what the life of the sequestrated person looks like after the final order is granted.


The Effect of Sequestration

A person remains under sequestration, either until ten years have lapsed, or until a person has successfully applied to Court for a rehabilitation order after four years. Whilst being sequestrated and before rehabilitation, there are certain things that the person who has been placed under sequestration can and cannot do.


After sequestration the creditors of the insolvent person needs to be protected.  The insolvent can therefore not enter into certain contracts, but his/her hands are not completely tied.



  • The insolvent cannot enter into any contract that sells any property that forms part of the insolvent estate. (The property will be sold by the trustee of the insolvent person to the benefit of all creditors)
  • The insolvent cannot sell moveable assets.  All the assets of the insolvent person form part of the insolvent estate and must be sold to the benefit of all creditors. (normally the insolvent buys back the moveable assets from his/her own estate)
  • The insolvent cannot enter into any other type of contract that will adversely affect his/her estate.
  • No further debt can be incurred by the insolvent.  The trustee can give permission to incur further debt if, for example, the insolvent needs a car and can afford it without negatively affecting the rest of the creditors.


The insolvent can enter into employment agreements or agreements to do business.



If the insolvent entered into a contract after date of sequestration and the contract is not prohibited, the contract will be binding and valid on the parties who entered into the contract.  There are instances where the contract may be binding, but the insolvent may not collect payment of money due in terms of such a contract, unless the Insolvency Act allows him/her to do so.

The insolvent may collect payment for work done for his/her own benefit in terms of an agreement he/she entered into either before or after date of sequestration. (This means that the money does not have to be into the insolvent estate to be used to the benefit of other creditors and the insolvent can keep it for him/herself).



Any agreement that the insolvent entered into after date of sequestration that is prohibited, the contract is voidable and not necessarily void. In this instance the curator can choose to either proceed with the agreement or cancel it. If the curator proceeds with the agreement, the contract will be binding on the parties. Where the curator chooses to proceed with the agreement, the proceeds will be paid into the insolvent estate for the benefit of all creditors and not the insolvent.

If the curator chooses not to proceed with the agreement, any monies that the insolvent has received must be returned to the other party. The insolvent will have to repay the monies back to his/her own insolvent estate.

Where an insolvent enter into an agreement with another party and the other party does not know or is not aware that the person he/she is contracting with is insolvent, the contract is still binding.  But this only applies to new assets that the insolvent purchased after sequestration. The third party will have to prove that he/she did not know or had no reason to suspect that the person was insolvent.



The person who was sequestrated can still earn an income.  The insolvent person can follow any profession or other employment and enter into contracts for these purposes.

The insolvent can however not be a trader who is a general dealer or a manufacturer and cannot have any interest in such a business. (A trader is somebody that sells all kinds of wares at a fixed address.)  The curator can however grant permission for the insolvent to trade as a general dealer or a manufacturer.   Any income the insolvent earns from contracts entered into for his/her employment, is received by the insolvent for his/her own benefit.



The insolvent may not enter into legal proceedings (sue or be sued), except for:

  • Divorce
  • Maintenance
  • Recovering of remuneration for work done or professional services rendered by the insolvent after date of sequestration
  • Pension
  • To claim compensation for damages suffered by the insolvent because of defamation or personal injury or as a result of an edict
  • The insolvent may also bring action against the curator(s) of his/her estate if the estate is mismanaged.


The insolvent cannot sue any person for money except for the above reasons; cannot bring a sequestration or liquidation application against another person; and cannot be sued either.


This article written by Nanika Prinsloo of Prinsloo & Associates.


  1. Thanks for this informative article. More and more we are coming across “Fix your debt with sequestration” offers and the consumers are not being made aware of the effect on them. This article lays that effect out and we will be using it when approached by consumers in the future.

  2. mydaughter have been sequetrated without any knowledge that they are sequestrating her, this thing of signing without reading. how can you help her. She cannot move on with her life anymore, please help.

  3. I have been sequestrated for 8years already and i am ready to purchase (cash) a house under my name. Will this have adverse consequences on my part

    • Well done.
      An option you have (rather than wait another 2 years) is to pay attorneys to get the sequestration removed.
      But who wouldn’t love to be able to buy a house for cash. Fantastic!

  4. I have a approximately 6 months of my sequestration to complete and then the ten years are over. May I apply for a loan to purchase a movable asset yet or must I wait until the lapse of my sequestration in July 2018. SARS owes my R174,000 which is due to me under my new tax number as I had to obtain a new number after the sequestration. This is pending

    • After some time, yes you will. But on the up side you will get to stay in your house without any rent/bond repayments for some time which allows you to save for your next place.

  5. Thank you for the insightful article. At the end of your article, you say that an insolvent cannot bring a sequestration or liquidation application of another person. Which case law or section in the insolvency act states this?

  6. Me and my ex got sequastrated Des 2011. He contacted me for rehabilitation. He said is would be for both of us. He also told me that there were money in the estate that would be devided between us after rehabilitation. I just found out that he only applied forhis rehabilitation. What is going to happen with the money that is still in the estate that is supposed to be devided berween us? Will his part of the money be paid to him after his rehabilitation? And what is going to happen to my part of the money. We were married incomunity of property

  7. What is the cost for rehabilitation before ten years have passed? Can I only apply for rehabilitation after four years?
    May I have a vehicle registered on my name that was paid for with cash while I am sequestrated?

    • You will have to talk to an Attorney in regard to costs. (check the service directory listing section of each issue of Debtfree magazine under “legal”)

      There are some extraordinary circumstances when you may apply at a different time but you should seek specialised info on that.

    • Sequestration does not affect pension or grant income:
      Section 23(7) of the Insolvency Act prohibits the attachment of your pension, an annuity funds or any other funds that full under the Pensions Act

  8. I have been sequestrated and not gone under rehab yet. Last year March we have entered into a rent to own a vehicle agreement, August of last year I was unemployed and we ran into difficulties paying the vehicle. We eventually managed to pay but now recently in April we couldnt afford it. They repossessed the car but now they want half of the monies owed of the 5 year agreement and other fees. Please advise if this is legal as we cannnot afford the vehicle and wont be able to cover this. Your advice is appreciated.

    • I presume the attorneys handling the sequestration (appointed) helped you put that arrangement in place? Perhaps they are the ones you should speak to at this point?

  9. Would going under voluntary sequestration affect my future career prospects. i.e. Moving up to management? Can it be held against me?

    • Yes, your car will have to be handed in. You should be able to rent another vehicle or buy a cheaper vehicle for cash (or even buy on credit under very specific conditions). Alternatively, you will have to become a taxi/public transport user like most of the country.

  10. Hi im 24 years old i did a voluntary sequestration. I now need to get a car. I can afford a monthly payment for a vehicle.. Where can i help with this?am i able to apply such car rentals or what??

  11. Hi I am sequestrated December 101 years. I want to apply for a loan to but a vehicle can they hold me responsible for the prev account which formed part of the sequestration?

    • The previous debt is gone and buried. It does not exist any more. If you are rehabilitated (at court) or if 10 years have gone by then you should be able to access credit again if you can afford it.

  12. I have been sequestrated for 7 years now. My curator gave me a permission letter to apply for a bond, will I be able to go to the bank with that letter and apply?

    • Seems that way, yes. Remember the bank then has the right to treat you like anyone else who applies and only offer you credit if they feel you can realistically repay it.

    • Hi sorry may i ask how you got a letter from your curator as i need to do the same , do you have to pay them or furnish them with any details or forms

  13. Does your 10yrs start from the time you applied or is it from the date you completed your last payment with the curator. Its been 3yrs since I paid my last payment but before that it was 18 months that I was paying the curator

  14. If i work in accounts and i apply for another job i can be declined a job , because nowadays they check your credit score if you work in accounts… this is a problem?

    • It entirely depends on what your potential employer knows about debt review. If they know it is a way to pay off your debts problem. If they think it means you don’t handle debts well then you could face an issue.

  15. Hi I lost Civil case where my pension, investments as well as the proceeds of the sale of my house was attached. The creditor has applied to sequestration of my wife and myself. Thus as granted what happens next
    as I am unemployed for more that three years and won’t be able to pay my creditor after losing my civil case

    • If you are sequestrated you will eventually have to move out of your house when it is eventually sold. Once sequestrated, however, your debts are gone and you are debt free. You then can begin to rehabilitate yourself but in the meantime will not use credit for anything.
      You have the right to go to court throughout any such process and share your side of things with the court to help them in their determination…It will help you to talk to an attorney who knows a lot about sequestration law.

      You may want to discuss an appeal with your attorneys though.

  16. hi does anyone know how you get a letter to apply for a bond from your curator , do you need to pay for the letter or do you need to supply the curator with any information in order to get the letter

    • Dear Mark, you cannot be an unrehabilited insolvent if you need to finance the purchase of property by means of a bond. In other words, you will first have to apply for your estate to be rehabilitated (which you can do after 4 years from date of sequestration). The curator will be involved in this application in that they shall be required to give a report.

    • Dear Rian, it is correct that after an expiry of 10 years from the date of sequestration an insolvent is automatically rehabilitated without having to apply to court. The exception is when the court has ordered otherwise, or a creditor has opposed the rehabilitation of the person during the period of being insolvent (rare in practice). One may nonetheless have to take active steps though to ensure that the records of the credit bureaux are updated.

  17. I have received a provisional sequestration notice brought by a company with whom my business had an agreement. There was a surety attached which is why they are coming after me personally. I have 2 questions:

    1 – I understand that you can only be sequestrated if you have something like R 0.22 per rand owed in your estate?

    2 – As a result of the company been put into liquidation and the creditor requesting me to be sequestrated because of the surety, I have no means of income. My partner has been offered a job in a different country and we will be moving there in the next month. How does this affect my sequestration?

  18. Dear Sarah, regarding your first enquiry, the courts in general will only grant a sequestration order if there seems to be a benefit to the general body of creditors. This means that there should be, from the free residue, at least a 20c in the Rand to distribute to creditors. Anything less than this would be subject to refusal and a danger of a contribution towards costs from the creditor who lodges and proves his claim.
    Regarding your second question, a creditor is entitled to still apply for the sequestration of an estate even if the person has relocated to another country. If there are any assets in the estate, it would still be attachable.

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