Timetable

There are a lot of questions regarding the timed periods for rehabilitation applications after sequestration. Therefore I decided to publish a Timeline as per the various sub-sections.

 

The following timetable was drafted according to my interpretation of Section 124 of the Insolvency Act, based on over two decades of experience. I hope and trust that this will assist potential clients in determining exactly when they will be entitled to apply for rehabilitation after being sequestrated.


At any time after Section 119(7) Certificate has been issued

This would only happen in less than 0.1% of all cases. Section 124(1) of the Insolvency Act states that an insolvent may apply for rehabilitation at any time after the Master issued a certificate in terms of Section 119(7) of the Insolvency Act.

The certificate serves as confirmation that at least three-fourths (¾) of creditors, who proved claims against the insolvent estate, have accepted a composition for payment of a dividend of at least 50c in the Rand for all concurrent creditors who proved their claims against the insolvent estate.

If such dividends have not been paid, confirms that security for the payment thereof has been given.

 

 

At any time after confirmation 

Section 124(5) of the Insolvency Act states that an insolvent may apply for rehabilitation of his or her estate at any time after the Master confirmed a distribution plan providing for payment of:  

  • All claims proved against the insolvent estate, in full; and   
  • Interest thereon calculated from the date of sequestration in terms of Section 103(2) ; and  
  • All the costs of sequestration.

 

After 6 months from date of sequestration

Section 124(3) of the Insolvency Act states that an insolvent who was sequestrated for the fist time may apply for rehabilitation after 6 months have lapsed from the date of sequestration, provided that: 

  • At the time of making the application, no claim has been proved against the insolvent estate; and  
  • They have not been convicted of any offences that would result in the application of Section 124(2)(c) of the Insolvency Act.

 

After 12 Months from confirmation

Most rehabilitation application falls into this category. Section 124(2)(a) of the Insolvency Act states that an insolvent who was sequestrated for the fist time may apply for rehabilitation after 12 months have lapsed from the date of confirmation by the Master of the trustee’s first liquidation and distribution account, provided that:

  • They have not been convicted of any offences that would result in the application of Section 124(2)(c) of the Insolvency Act; and 
  • At least four years have expired from the date of sequestration, except upon the recommendation of the Master.

 

After 3 years if previously sequestrated

Section 124(2)(b) of the Insolvency Act states that if an insolvent has been sequestrated previously, he or she may only apply for rehabilitation of their estate after three years have elapsed from the date of confirmation by the Master of the trustee’s first liquidation and distribution account, provided that:

  • They have not been convicted of any offences that would result in the application of Section 124(2)(c) of the Insolvency Act; and
  • At least four years have expired from the date of sequestration, except upon the recommendation of the Master.

 


After 5 years if convicted

Section 124(2)(c) of the Insolvency Act applies to any insolvent that was convicted of any fraudulent act in relation to the existing or any previous insolvency, or of any offence under Sections 132, 133 or 134 of the Act. Such an insolvent may only apply for rehabilitation after five years have elapsed from the date of conviction.

 

After 10 years from sequestration date - automatic rehabilitation

Section 127A(1) of the Insolvency Act stipulates that any insolvent who was not rehabilitated by court application within 10 years from the date of their sequestration, is deemed to be rehabilitated.

The rehabilitation in terms of Section 127A (1) is automatic; there are no court procedures, applications or formalities.

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