fbpx

INSOLVENCY AND BUSINESS TURN-AROUND SPECIALISTS

info@liquidationattorneys.co.za

INSOLVENCY AND BUSINESS TURN-AROUND SPECIALISTS

010 286 1966 | info@liquidationattorneys.co.za

Insolvency Law Specialist Attorneys

Solutions for Your Debt Problems.

5+ star Google review

Solutions for Your Debt Problems.

Insolvency Law Specialist Attorneys

5+ star Google review

Insolvency Attorneys

Let our experience be your guide

Your search is over! When things get tough, you don’t have to face them alone. When you’re in a tight spot, Insolvency Attorneys is here for you. We’ve helped thousands of people with their debt problems and we can help you too. We have over 12 years of experience in Insolvency Law. We are the professionals you need to get you taken care of. We have a hassle-free process and believes that clients need to be kept in the loop.

Insolvency Attorneys

Let our experience be your guide

Your search is over! When things get tough, you don’t have to face them alone. When you’re in a tight spot, Insolvency Attorneys is here for you. We’ve helped thousands of people with their debt problems and we can help you too. We have over 12 years of experience in Insolvency Law. We are the professionals you need to get you taken care of. We have a hassle-free process and believes that clients need to be kept in the loop.

our attorneys

FREQUENTLY ASKED QUESTIONS REHABILITATION

What is the effect of rehabilitation regarding my adverse information on the Credit Bureaus?

The National Credit Act has had the effect of changing the rules of the Credit Bureaus. Before the National Credit Act, the adverse credit information of someone who rehabilitated was carried on the credit Bureaus for 10 years after rehabilitation. The current position is that the moment a person rehabilitates, the adverse credit information (pertaining to debt incurred before sequestration) is supposed to be removed from ITC, Experion etc. The only reference that stays for a period of 5 years is a notice of your rehabilitation.

Who has the responsibility to remove my adverse credit information at the Credit bureaus?

Once the court grants your rehabilitation order, the Registrar of the High Court must despatch a copy of the order to the credit bureaus who must then remove your adverse credit information. The unfortunate situation is that the credit bureau fails or neglects to do their work. When we do our client’s rehabilitation we attend to this. The practical procedure is that we lodge an objection at the credit bureau and we forward the rehabilitation order to the credit bureau along with the objection. According to the rules of the credit bureaus, if no one objects to the removal of your name from the credit bureau within twenty one days, they must remove all adverse information of which the course of action has arisen before the date of your sequestration.

It sometimes happens that a creditor has taken judgement against you after you have been sequestrated. The credit bureaus then refuse to remove the judgements that were taken after sequestration unless we get a letter from the creditor (or their attorneys) in which they state that the cause of action has arisen before sequestration. If this hick-up does occur it sometimes takes us months to clear your name, but the job gets done in the end. Our personnel sometimes spend hours (literally) the phone with the credit bureaus in an effort to get them to do their work. The “clean-up” process is supposed to take at the most thirty days, but sometimes takes as long as three or four months. It is a rather humbling experience to negotiate with someone at the credit bureau who has standard 4 (welding) on his name.

What is the effect of my rehabilitation on my future participation in commerce?

Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

What must the judge consider when granting a Rehabilitation Order?

Whether certain formalities have been met, but essentially whether you are fit and proper to partake fully in the commercial environment.

Which Court has jurisdiction to rehabilitate me?

Only the Court that gave the sequestration order. There are a few exceptions on which we will advise you.

If all my creditors have been paid in full and there is still some money left over, what happens to that money?

Your trustee must pay the money into the guardian fund which falls under control of the Master of the High Court. Once all your creditors have been settled in full, you immediately qualify to bring an application for your rehabilitation. After the Court has granted the rehabilitation order you can collect the money from the guardian fund. Unfortunately in practise it is not that easy. The Masters office has tremendous procedure problems and sometimes it takes us a year to get your money back from the guardian fund. If everything runs smoothly there is no reason why this should not take more than a few days.

Why don’t I simply wait ten years?

Before you can fully and properly partake in commerce you must be rehabilitated. Banks will not allow you to open cheque accounts, credit cards, or to borrow money to purchase a property, car etc. unless you are rehabilitated. The further problem is that, for as long as you are not rehabilitated, every asset that you accumulate during sequestration vests in your insolvent estate.

What is a Vesting Order?

If you have accumulated assets during your sequestration, those assets are deemed to form part of your insolvent estate (Section 24(2)(b) of the Insolvency Act read with Section 123(1)). If you have for example bought a house, you must, when applying for rehabilitation, also ask the court to give an order in terms whereof the property that you have bought vest in your “new” estate. If you have bought for example household furniture and an inexpensive motorcar etc, you don’t need to ask the Court for a Vesting Order because these assets are needed to maintain normal and ordinary lifestyle.

How do I determine whether I qualify for rehabilitation?

Should you contact our offices, we will, for an agreed fee determine whether you qualify for rehabilitation. Should you qualify the fee that we have already charged you is deducted from the fee that we will charge you for the rehabilitation, even if the rehabilitation application can only be brought a few years in future.

What is the banks’ attitude when considering lending money to an insolvent that has been rehabilitated?

In my experience, those banks which lost money in your sequestration are difficult. Banks who were not creditors in your insolvent estate will normally help you. They might want you to go through a “probation” (own term) period, to determine how you deal with accounts they opened for you. My advice is; do not take no for an answer, keep on trying.

Will my application for rehabilitation succeed?
"What does “contribution” mean?

In the winding-up of your estate it might happen that, even though preferent creditors receive a dividend, there is not enough funds to cover the administrative costs of your estate. You must keep in mind that preferent creditors are only obliged to pay the cost of realisation of the asset of which they hold security. They are not obliged to pay the “general administrative cost”. Should there be a shortfall in the “general administrative cost” then each creditor who has proven a claim in your insolvent estate becomes liable for the administrative cost, pro rata to the amount of his claim.

It is important to note that, when you bring an Application for your rehabilitation, you must repay this administrative cost. You must not confuse the contribution towards the shortfall on administrative cost with repayment of old debt. In present terms the contribution can vary from zero to as much as R25,000.00 at the time of your Application for Rehabilitation.

Must I repay my debts before I can apply for rehabilitation?

No. In layman’s terms, when you are sequestrated your debt is written off. None of your old creditors can ever force you to pay back the “old debt”. In legal terms your debt is not written off, it vests in a trustee who must realise the assets and distribute the yield of the sale of the assets amongst creditors in accordance to insolvency act.

What about debt incurred during sequestration?

If you incurred debts after sequestration it does not fall in your insolvent estate and you must simply pay the debt.

Does the National Credit Act have an effect on my position after I have rehabilitated?

Yes indeed. The Act was written in common English and we hereunder quote certain relevant sections of the National Credit Act number 34 of 2005.

Chapter four of the National Credit Act deals with Consumer credit policy – it reads as follows:

“Protection against discrimination in respect of credit:

Section 61(1): Relative to the treatment of any of other consumer or prospective consumer, a credit provider must not unfairly discriminate directly or indirectly against any natural person, juristic person or association of persons on one or more grounds set out in Section 9(3) of the Constitution, or on one or more grounds set out in Chapter 2 of the Promotion of Equality and Prevention of Unfair Discrimination Act, when-

(a) Assessing the ability of the person to meet the obligations of a proposed credit agreement;

(b) Deciding whether to refuse an application to enter into a credit agreement, or to offer or enter into a credit agreement;

(c) Determining any aspect of the cost of a credit agreement, to the consumer;

(d) Proposing or agreeing on the terms and conditions of a credit agreement;

(e) Assessing or requiring compliance by the person with the terms of a credit agreement;

(f) Exercising any right of the credit provider under a credit agreement, this Act or applicable provincial legislation;

(g) determining whether to continue, enforce, seek judgment in respect of or terminate a credit agreement; or

(h) Determining whether to report or reporting any credit information or record.”

Section 61(3) of the Consumer Credit Policy, which reads as follows:

“Subsection (1) and (2) apply in respect of a consumer or prospective consumer that is an association or juristic person to prohibit unfair discrimination against that association or juristic person based on the characteristics of any natural person who is a member, associate, owner, manager, employee, client or customer of that association or juristic person.

Section 61(5) Reads:

A credit provider may determine for itself any scoring or other evaluative mechanism or model to be used in managing, underwriting and pricing credit risk, provided that any such mechanism or model is not founded or structured upon a statistical or other analysis in which the basis of risk categorization, differentiation or assessment is a ground of unfair discrimination prohibited in Section 9(3) of the Constitution.

So far so good. Section 61(5) is problematic. The act states that “…A credit provider may determine for itself any scoring or other evaluative mechanism or model to be used…”, but, in my opinion, to prove that the bank discriminates against you, you only need to prove to Court that the bank has in the past granted finance to any other customer of its customers, which customer was previously sequestrated and has a similar or weaker financial profile than you.

Section 61(6) Reads:

In respect of an alleged contravention of this Section, any person contemplated in Section 20(1) of the Promotion of Equality and Prevention of Unfair Discrimination Act, may either-

  1. institute proceedings before an equality court, in terms of Chapter 4 of the

Promotion of Equality and Prevention of Unfair Discrimination Act; or

  1. make a complaint to the National Credit Regulator in terms of Section 136, which must refer the complaint to the equality court, if the complaint appears to be valid.
Right to reasons for credit being refused:

62. (1) On request from a consumer, a credit provider must advise the consumer in writing of the dominant reason for-

(a) refusing to enter into a credit agreement with that consumer;

(b) offering the consumer a lower credit limit under a credit facility than applied for by the consumer, or reducing the credit limit under an existing credit facility;

(c) refusing a request from the consumer to increase a credit limit under an existing credit facility; or

(d) refusing to renew an expiring credit card or similar renewable credit facility with that consumer.

62.(2) When responding to a request in terms of subsection (1), a credit provider who has based its decision on an adverse credit report received from a credit bureau must advise the consumer in writing of the name, address and other contact particulars of that credit bureau.

62.(3) On application by a credit provider, the Tribunal may make an order limiting the credit provider’s obligation in terms of this Section if the Tribunal is satisfied that the consumer’s requests for information are frivolous or vexatious.”

BREYTEN POTGIETER

FREQUENTLY ASKED QUESTIONS REHABILITATION

What is the effect of rehabilitation regarding my adverse information on the Credit Bureaus?

The National Credit Act has had the effect of changing the rules of the Credit Bureaus. Before the National Credit Act, the adverse credit information of someone who rehabilitated was carried on the credit Bureaus for 10 years after rehabilitation. The current position is that the moment a person rehabilitates, the adverse credit information (pertaining to debt incurred before sequestration) is supposed to be removed from ITC, Experion etc. The only reference that stays for a period of 5 years is a notice of your rehabilitation.

Who has the responsibility to remove my adverse credit information at the Credit bureaus?

Once the court grants your rehabilitation order, the Registrar of the High Court must despatch a copy of the order to the credit bureaus who must then remove your adverse credit information. The unfortunate situation is that the credit bureau fails or neglects to do their work. When we do our client’s rehabilitation we attend to this. The practical procedure is that we lodge an objection at the credit bureau and we forward the rehabilitation order to the credit bureau along with the objection. According to the rules of the credit bureaus, if no one objects to the removal of your name from the credit bureau within twenty one days, they must remove all adverse information of which the course of action has arisen before the date of your sequestration.

It sometimes happens that a creditor has taken judgement against you after you have been sequestrated. The credit bureaus then refuse to remove the judgements that were taken after sequestration unless we get a letter from the creditor (or their attorneys) in which they state that the cause of action has arisen before sequestration. If this hick-up does occur it sometimes takes us months to clear your name, but the job gets done in the end. Our personnel sometimes spend hours (literally) the phone with the credit bureaus in an effort to get them to do their work. The “clean-up” process is supposed to take at the most thirty days, but sometimes takes as long as three or four months. It is a rather humbling experience to negotiate with someone at the credit bureau who has standard 4 (welding) on his name.

What is the effect of my rehabilitation on my future participation in commerce?

Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

What must the judge consider when granting a Rehabilitation Order?

Whether certain formalities have been met, but essentially whether you are fit and proper to partake fully in the commercial environment.

Which Court has jurisdiction to rehabilitate me?

Only the Court that gave the sequestration order. There are a few exceptions on which we will advise you.

If all my creditors have been paid in full and there is still some money left over, what happens to that money?

Your trustee must pay the money into the guardian fund which falls under control of the Master of the High Court. Once all your creditors have been settled in full, you immediately qualify to bring an application for your rehabilitation. After the Court has granted the rehabilitation order you can collect the money from the guardian fund. Unfortunately in practise it is not that easy. The Masters office has tremendous procedure problems and sometimes it takes us a year to get your money back from the guardian fund. If everything runs smoothly there is no reason why this should not take more than a few days.

Why don’t I simply wait ten years?

Before you can fully and properly partake in commerce you must be rehabilitated. Banks will not allow you to open cheque accounts, credit cards, or to borrow money to purchase a property, car etc. unless you are rehabilitated. The further problem is that, for as long as you are not rehabilitated, every asset that you accumulate during sequestration vests in your insolvent estate.

What is a Vesting Order?

If you have accumulated assets during your sequestration, those assets are deemed to form part of your insolvent estate (Section 24(2)(b) of the Insolvency Act read with Section 123(1)). If you have for example bought a house, you must, when applying for rehabilitation, also ask the court to give an order in terms whereof the property that you have bought vest in your “new” estate. If you have bought for example household furniture and an inexpensive motorcar etc, you don’t need to ask the Court for a Vesting Order because these assets are needed to maintain normal and ordinary lifestyle.

How do I determine whether I qualify for rehabilitation?

Should you contact our offices, we will, for an agreed fee determine whether you qualify for rehabilitation. Should you qualify the fee that we have already charged you is deducted from the fee that we will charge you for the rehabilitation, even if the rehabilitation application can only be brought a few years in future.

What is the banks’ attitude when considering lending money to an insolvent that has been rehabilitated?

In my experience, those banks which lost money in your sequestration are difficult. Banks who were not creditors in your insolvent estate will normally help you. They might want you to go through a “probation” (own term) period, to determine how you deal with accounts they opened for you. My advice is; do not take no for an answer, keep on trying.

Will my application for rehabilitation succeed?
"What does “contribution” mean?

In the winding-up of your estate it might happen that, even though preferent creditors receive a dividend, there is not enough funds to cover the administrative costs of your estate. You must keep in mind that preferent creditors are only obliged to pay the cost of realisation of the asset of which they hold security. They are not obliged to pay the “general administrative cost”. Should there be a shortfall in the “general administrative cost” then each creditor who has proven a claim in your insolvent estate becomes liable for the administrative cost, pro rata to the amount of his claim.

It is important to note that, when you bring an Application for your rehabilitation, you must repay this administrative cost. You must not confuse the contribution towards the shortfall on administrative cost with repayment of old debt. In present terms the contribution can vary from zero to as much as R25,000.00 at the time of your Application for Rehabilitation.

Must I repay my debts before I can apply for rehabilitation?

No. In layman’s terms, when you are sequestrated your debt is written off. None of your old creditors can ever force you to pay back the “old debt”. In legal terms your debt is not written off, it vests in a trustee who must realise the assets and distribute the yield of the sale of the assets amongst creditors in accordance to insolvency act.

What about debt incurred during sequestration?

If you incurred debts after sequestration it does not fall in your insolvent estate and you must simply pay the debt.

Does the National Credit Act have an effect on my position after I have rehabilitated?

Yes indeed. The Act was written in common English and we hereunder quote certain relevant sections of the National Credit Act number 34 of 2005.

Chapter four of the National Credit Act deals with Consumer credit policy – it reads as follows:

“Protection against discrimination in respect of credit:

Section 61(1): Relative to the treatment of any of other consumer or prospective consumer, a credit provider must not unfairly discriminate directly or indirectly against any natural person, juristic person or association of persons on one or more grounds set out in Section 9(3) of the Constitution, or on one or more grounds set out in Chapter 2 of the Promotion of Equality and Prevention of Unfair Discrimination Act, when-

(a) Assessing the ability of the person to meet the obligations of a proposed credit agreement;

(b) Deciding whether to refuse an application to enter into a credit agreement, or to offer or enter into a credit agreement;

(c) Determining any aspect of the cost of a credit agreement, to the consumer;

(d) Proposing or agreeing on the terms and conditions of a credit agreement;

(e) Assessing or requiring compliance by the person with the terms of a credit agreement;

(f) Exercising any right of the credit provider under a credit agreement, this Act or applicable provincial legislation;

(g) determining whether to continue, enforce, seek judgment in respect of or terminate a credit agreement; or

(h) Determining whether to report or reporting any credit information or record.”

Section 61(3) of the Consumer Credit Policy, which reads as follows:

“Subsection (1) and (2) apply in respect of a consumer or prospective consumer that is an association or juristic person to prohibit unfair discrimination against that association or juristic person based on the characteristics of any natural person who is a member, associate, owner, manager, employee, client or customer of that association or juristic person.

Section 61(5) Reads:

A credit provider may determine for itself any scoring or other evaluative mechanism or model to be used in managing, underwriting and pricing credit risk, provided that any such mechanism or model is not founded or structured upon a statistical or other analysis in which the basis of risk categorization, differentiation or assessment is a ground of unfair discrimination prohibited in Section 9(3) of the Constitution.

So far so good. Section 61(5) is problematic. The act states that “…A credit provider may determine for itself any scoring or other evaluative mechanism or model to be used…”, but, in my opinion, to prove that the bank discriminates against you, you only need to prove to Court that the bank has in the past granted finance to any other customer of its customers, which customer was previously sequestrated and has a similar or weaker financial profile than you.

Section 61(6) Reads:

In respect of an alleged contravention of this Section, any person contemplated in Section 20(1) of the Promotion of Equality and Prevention of Unfair Discrimination Act, may either-

  1. institute proceedings before an equality court, in terms of Chapter 4 of the

Promotion of Equality and Prevention of Unfair Discrimination Act; or

  1. make a complaint to the National Credit Regulator in terms of Section 136, which must refer the complaint to the equality court, if the complaint appears to be valid.
Right to reasons for credit being refused:

62. (1) On request from a consumer, a credit provider must advise the consumer in writing of the dominant reason for-

(a) refusing to enter into a credit agreement with that consumer;

(b) offering the consumer a lower credit limit under a credit facility than applied for by the consumer, or reducing the credit limit under an existing credit facility;

(c) refusing a request from the consumer to increase a credit limit under an existing credit facility; or

(d) refusing to renew an expiring credit card or similar renewable credit facility with that consumer.

62.(2) When responding to a request in terms of subsection (1), a credit provider who has based its decision on an adverse credit report received from a credit bureau must advise the consumer in writing of the name, address and other contact particulars of that credit bureau.

62.(3) On application by a credit provider, the Tribunal may make an order limiting the credit provider’s obligation in terms of this Section if the Tribunal is satisfied that the consumer’s requests for information are frivolous or vexatious.”

Director, Attorney, LLB

Johann Pepler

FREQUENTLY ASKED QUESTIONS REHABILITATION

What is the effect of rehabilitation regarding my adverse information on the Credit Bureaus?

The National Credit Act has had the effect of changing the rules of the Credit Bureaus. Before the National Credit Act, the adverse credit information of someone who rehabilitated was carried on the credit Bureaus for 10 years after rehabilitation. The current position is that the moment a person rehabilitates, the adverse credit information (pertaining to debt incurred before sequestration) is supposed to be removed from ITC, Experion etc. The only reference that stays for a period of 5 years is a notice of your rehabilitation.

Who has the responsibility to remove my adverse credit information at the Credit bureaus?

Once the court grants your rehabilitation order, the Registrar of the High Court must despatch a copy of the order to the credit bureaus who must then remove your adverse credit information. The unfortunate situation is that the credit bureau fails or neglects to do their work. When we do our client’s rehabilitation we attend to this. The practical procedure is that we lodge an objection at the credit bureau and we forward the rehabilitation order to the credit bureau along with the objection. According to the rules of the credit bureaus, if no one objects to the removal of your name from the credit bureau within twenty one days, they must remove all adverse information of which the course of action has arisen before the date of your sequestration.

It sometimes happens that a creditor has taken judgement against you after you have been sequestrated. The credit bureaus then refuse to remove the judgements that were taken after sequestration unless we get a letter from the creditor (or their attorneys) in which they state that the cause of action has arisen before sequestration. If this hick-up does occur it sometimes takes us months to clear your name, but the job gets done in the end. Our personnel sometimes spend hours (literally) the phone with the credit bureaus in an effort to get them to do their work. The “clean-up” process is supposed to take at the most thirty days, but sometimes takes as long as three or four months. It is a rather humbling experience to negotiate with someone at the credit bureau who has standard 4 (welding) on his name.

What is the effect of my rehabilitation on my future participation in commerce?

Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

What must the judge consider when granting a Rehabilitation Order?

Whether certain formalities have been met, but essentially whether you are fit and proper to partake fully in the commercial environment.

Which Court has jurisdiction to rehabilitate me?

Only the Court that gave the sequestration order. There are a few exceptions on which we will advise you.

If all my creditors have been paid in full and there is still some money left over, what happens to that money?

Your trustee must pay the money into the guardian fund which falls under control of the Master of the High Court. Once all your creditors have been settled in full, you immediately qualify to bring an application for your rehabilitation. After the Court has granted the rehabilitation order you can collect the money from the guardian fund. Unfortunately in practise it is not that easy. The Masters office has tremendous procedure problems and sometimes it takes us a year to get your money back from the guardian fund. If everything runs smoothly there is no reason why this should not take more than a few days.

Why don’t I simply wait ten years?

Before you can fully and properly partake in commerce you must be rehabilitated. Banks will not allow you to open cheque accounts, credit cards, or to borrow money to purchase a property, car etc. unless you are rehabilitated. The further problem is that, for as long as you are not rehabilitated, every asset that you accumulate during sequestration vests in your insolvent estate.

What is a Vesting Order?

If you have accumulated assets during your sequestration, those assets are deemed to form part of your insolvent estate (Section 24(2)(b) of the Insolvency Act read with Section 123(1)). If you have for example bought a house, you must, when applying for rehabilitation, also ask the court to give an order in terms whereof the property that you have bought vest in your “new” estate. If you have bought for example household furniture and an inexpensive motorcar etc, you don’t need to ask the Court for a Vesting Order because these assets are needed to maintain normal and ordinary lifestyle.

How do I determine whether I qualify for rehabilitation?

Should you contact our offices, we will, for an agreed fee determine whether you qualify for rehabilitation. Should you qualify the fee that we have already charged you is deducted from the fee that we will charge you for the rehabilitation, even if the rehabilitation application can only be brought a few years in future.

What is the banks’ attitude when considering lending money to an insolvent that has been rehabilitated?

In my experience, those banks which lost money in your sequestration are difficult. Banks who were not creditors in your insolvent estate will normally help you. They might want you to go through a “probation” (own term) period, to determine how you deal with accounts they opened for you. My advice is; do not take no for an answer, keep on trying.

Will my application for rehabilitation succeed?
"What does “contribution” mean?

In the winding-up of your estate it might happen that, even though preferent creditors receive a dividend, there is not enough funds to cover the administrative costs of your estate. You must keep in mind that preferent creditors are only obliged to pay the cost of realisation of the asset of which they hold security. They are not obliged to pay the “general administrative cost”. Should there be a shortfall in the “general administrative cost” then each creditor who has proven a claim in your insolvent estate becomes liable for the administrative cost, pro rata to the amount of his claim.

It is important to note that, when you bring an Application for your rehabilitation, you must repay this administrative cost. You must not confuse the contribution towards the shortfall on administrative cost with repayment of old debt. In present terms the contribution can vary from zero to as much as R25,000.00 at the time of your Application for Rehabilitation.

Must I repay my debts before I can apply for rehabilitation?

No. In layman’s terms, when you are sequestrated your debt is written off. None of your old creditors can ever force you to pay back the “old debt”. In legal terms your debt is not written off, it vests in a trustee who must realise the assets and distribute the yield of the sale of the assets amongst creditors in accordance to insolvency act.

What about debt incurred during sequestration?

If you incurred debts after sequestration it does not fall in your insolvent estate and you must simply pay the debt.

Does the National Credit Act have an effect on my position after I have rehabilitated?

Yes indeed. The Act was written in common English and we hereunder quote certain relevant sections of the National Credit Act number 34 of 2005.

Chapter four of the National Credit Act deals with Consumer credit policy – it reads as follows:

“Protection against discrimination in respect of credit:

Section 61(1): Relative to the treatment of any of other consumer or prospective consumer, a credit provider must not unfairly discriminate directly or indirectly against any natural person, juristic person or association of persons on one or more grounds set out in Section 9(3) of the Constitution, or on one or more grounds set out in Chapter 2 of the Promotion of Equality and Prevention of Unfair Discrimination Act, when-

(a) Assessing the ability of the person to meet the obligations of a proposed credit agreement;

(b) Deciding whether to refuse an application to enter into a credit agreement, or to offer or enter into a credit agreement;

(c) Determining any aspect of the cost of a credit agreement, to the consumer;

(d) Proposing or agreeing on the terms and conditions of a credit agreement;

(e) Assessing or requiring compliance by the person with the terms of a credit agreement;

(f) Exercising any right of the credit provider under a credit agreement, this Act or applicable provincial legislation;

(g) determining whether to continue, enforce, seek judgment in respect of or terminate a credit agreement; or

(h) Determining whether to report or reporting any credit information or record.”

Section 61(3) of the Consumer Credit Policy, which reads as follows:

“Subsection (1) and (2) apply in respect of a consumer or prospective consumer that is an association or juristic person to prohibit unfair discrimination against that association or juristic person based on the characteristics of any natural person who is a member, associate, owner, manager, employee, client or customer of that association or juristic person.

Section 61(5) Reads:

A credit provider may determine for itself any scoring or other evaluative mechanism or model to be used in managing, underwriting and pricing credit risk, provided that any such mechanism or model is not founded or structured upon a statistical or other analysis in which the basis of risk categorization, differentiation or assessment is a ground of unfair discrimination prohibited in Section 9(3) of the Constitution.

So far so good. Section 61(5) is problematic. The act states that “…A credit provider may determine for itself any scoring or other evaluative mechanism or model to be used…”, but, in my opinion, to prove that the bank discriminates against you, you only need to prove to Court that the bank has in the past granted finance to any other customer of its customers, which customer was previously sequestrated and has a similar or weaker financial profile than you.

Section 61(6) Reads:

In respect of an alleged contravention of this Section, any person contemplated in Section 20(1) of the Promotion of Equality and Prevention of Unfair Discrimination Act, may either-

  1. institute proceedings before an equality court, in terms of Chapter 4 of the

Promotion of Equality and Prevention of Unfair Discrimination Act; or

  1. make a complaint to the National Credit Regulator in terms of Section 136, which must refer the complaint to the equality court, if the complaint appears to be valid.
Right to reasons for credit being refused:

62. (1) On request from a consumer, a credit provider must advise the consumer in writing of the dominant reason for-

(a) refusing to enter into a credit agreement with that consumer;

(b) offering the consumer a lower credit limit under a credit facility than applied for by the consumer, or reducing the credit limit under an existing credit facility;

(c) refusing a request from the consumer to increase a credit limit under an existing credit facility; or

(d) refusing to renew an expiring credit card or similar renewable credit facility with that consumer.

62.(2) When responding to a request in terms of subsection (1), a credit provider who has based its decision on an adverse credit report received from a credit bureau must advise the consumer in writing of the name, address and other contact particulars of that credit bureau.

62.(3) On application by a credit provider, the Tribunal may make an order limiting the credit provider’s obligation in terms of this Section if the Tribunal is satisfied that the consumer’s requests for information are frivolous or vexatious.”

Attorney, LLB, LLM 

our attorneys

FREQUENTLY ASKED QUESTIONS REHABILITATION

What is the effect of rehabilitation regarding my adverse information on the Credit Bureaus?

The National Credit Act has had the effect of changing the rules of the Credit Bureaus. Before the National Credit Act, the adverse credit information of someone who rehabilitated was carried on the credit Bureaus for 10 years after rehabilitation. The current position is that the moment a person rehabilitates, the adverse credit information (pertaining to debt incurred before sequestration) is supposed to be removed from ITC, Experion etc. The only reference that stays for a period of 5 years is a notice of your rehabilitation.

Who has the responsibility to remove my adverse credit information at the Credit bureaus?

Once the court grants your rehabilitation order, the Registrar of the High Court must despatch a copy of the order to the credit bureaus who must then remove your adverse credit information. The unfortunate situation is that the credit bureau fails or neglects to do their work. When we do our client’s rehabilitation we attend to this. The practical procedure is that we lodge an objection at the credit bureau and we forward the rehabilitation order to the credit bureau along with the objection. According to the rules of the credit bureaus, if no one objects to the removal of your name from the credit bureau within twenty one days, they must remove all adverse information of which the course of action has arisen before the date of your sequestration.

It sometimes happens that a creditor has taken judgement against you after you have been sequestrated. The credit bureaus then refuse to remove the judgements that were taken after sequestration unless we get a letter from the creditor (or their attorneys) in which they state that the cause of action has arisen before sequestration. If this hick-up does occur it sometimes takes us months to clear your name, but the job gets done in the end. Our personnel sometimes spend hours (literally) the phone with the credit bureaus in an effort to get them to do their work. The “clean-up” process is supposed to take at the most thirty days, but sometimes takes as long as three or four months. It is a rather humbling experience to negotiate with someone at the credit bureau who has standard 4 (welding) on his name.

What is the effect of my rehabilitation on my future participation in commerce?

Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

What must the judge consider when granting a Rehabilitation Order?

Whether certain formalities have been met, but essentially whether you are fit and proper to partake fully in the commercial environment.

Which Court has jurisdiction to rehabilitate me?

Only the Court that gave the sequestration order. There are a few exceptions on which we will advise you.

If all my creditors have been paid in full and there is still some money left over, what happens to that money?

Your trustee must pay the money into the guardian fund which falls under control of the Master of the High Court. Once all your creditors have been settled in full, you immediately qualify to bring an application for your rehabilitation. After the Court has granted the rehabilitation order you can collect the money from the guardian fund. Unfortunately in practise it is not that easy. The Masters office has tremendous procedure problems and sometimes it takes us a year to get your money back from the guardian fund. If everything runs smoothly there is no reason why this should not take more than a few days.

Why don’t I simply wait ten years?

Before you can fully and properly partake in commerce you must be rehabilitated. Banks will not allow you to open cheque accounts, credit cards, or to borrow money to purchase a property, car etc. unless you are rehabilitated. The further problem is that, for as long as you are not rehabilitated, every asset that you accumulate during sequestration vests in your insolvent estate.

What is a Vesting Order?

If you have accumulated assets during your sequestration, those assets are deemed to form part of your insolvent estate (Section 24(2)(b) of the Insolvency Act read with Section 123(1)). If you have for example bought a house, you must, when applying for rehabilitation, also ask the court to give an order in terms whereof the property that you have bought vest in your “new” estate. If you have bought for example household furniture and an inexpensive motorcar etc, you don’t need to ask the Court for a Vesting Order because these assets are needed to maintain normal and ordinary lifestyle.

How do I determine whether I qualify for rehabilitation?

Should you contact our offices, we will, for an agreed fee determine whether you qualify for rehabilitation. Should you qualify the fee that we have already charged you is deducted from the fee that we will charge you for the rehabilitation, even if the rehabilitation application can only be brought a few years in future.

What is the banks’ attitude when considering lending money to an insolvent that has been rehabilitated?

In my experience, those banks which lost money in your sequestration are difficult. Banks who were not creditors in your insolvent estate will normally help you. They might want you to go through a “probation” (own term) period, to determine how you deal with accounts they opened for you. My advice is; do not take no for an answer, keep on trying.

Will my application for rehabilitation succeed?
"What does “contribution” mean?

In the winding-up of your estate it might happen that, even though preferent creditors receive a dividend, there is not enough funds to cover the administrative costs of your estate. You must keep in mind that preferent creditors are only obliged to pay the cost of realisation of the asset of which they hold security. They are not obliged to pay the “general administrative cost”. Should there be a shortfall in the “general administrative cost” then each creditor who has proven a claim in your insolvent estate becomes liable for the administrative cost, pro rata to the amount of his claim.

It is important to note that, when you bring an Application for your rehabilitation, you must repay this administrative cost. You must not confuse the contribution towards the shortfall on administrative cost with repayment of old debt. In present terms the contribution can vary from zero to as much as R25,000.00 at the time of your Application for Rehabilitation.

Must I repay my debts before I can apply for rehabilitation?

No. In layman’s terms, when you are sequestrated your debt is written off. None of your old creditors can ever force you to pay back the “old debt”. In legal terms your debt is not written off, it vests in a trustee who must realise the assets and distribute the yield of the sale of the assets amongst creditors in accordance to insolvency act.

What about debt incurred during sequestration?

If you incurred debts after sequestration it does not fall in your insolvent estate and you must simply pay the debt.

Does the National Credit Act have an effect on my position after I have rehabilitated?

Yes indeed. The Act was written in common English and we hereunder quote certain relevant sections of the National Credit Act number 34 of 2005.

Chapter four of the National Credit Act deals with Consumer credit policy – it reads as follows:

“Protection against discrimination in respect of credit:

Section 61(1): Relative to the treatment of any of other consumer or prospective consumer, a credit provider must not unfairly discriminate directly or indirectly against any natural person, juristic person or association of persons on one or more grounds set out in Section 9(3) of the Constitution, or on one or more grounds set out in Chapter 2 of the Promotion of Equality and Prevention of Unfair Discrimination Act, when-

(a) Assessing the ability of the person to meet the obligations of a proposed credit agreement;

(b) Deciding whether to refuse an application to enter into a credit agreement, or to offer or enter into a credit agreement;

(c) Determining any aspect of the cost of a credit agreement, to the consumer;

(d) Proposing or agreeing on the terms and conditions of a credit agreement;

(e) Assessing or requiring compliance by the person with the terms of a credit agreement;

(f) Exercising any right of the credit provider under a credit agreement, this Act or applicable provincial legislation;

(g) determining whether to continue, enforce, seek judgment in respect of or terminate a credit agreement; or

(h) Determining whether to report or reporting any credit information or record.”

Section 61(3) of the Consumer Credit Policy, which reads as follows:

“Subsection (1) and (2) apply in respect of a consumer or prospective consumer that is an association or juristic person to prohibit unfair discrimination against that association or juristic person based on the characteristics of any natural person who is a member, associate, owner, manager, employee, client or customer of that association or juristic person.

Section 61(5) Reads:

A credit provider may determine for itself any scoring or other evaluative mechanism or model to be used in managing, underwriting and pricing credit risk, provided that any such mechanism or model is not founded or structured upon a statistical or other analysis in which the basis of risk categorization, differentiation or assessment is a ground of unfair discrimination prohibited in Section 9(3) of the Constitution.

So far so good. Section 61(5) is problematic. The act states that “…A credit provider may determine for itself any scoring or other evaluative mechanism or model to be used…”, but, in my opinion, to prove that the bank discriminates against you, you only need to prove to Court that the bank has in the past granted finance to any other customer of its customers, which customer was previously sequestrated and has a similar or weaker financial profile than you.

Section 61(6) Reads:

In respect of an alleged contravention of this Section, any person contemplated in Section 20(1) of the Promotion of Equality and Prevention of Unfair Discrimination Act, may either-

  1. institute proceedings before an equality court, in terms of Chapter 4 of the

Promotion of Equality and Prevention of Unfair Discrimination Act; or

  1. make a complaint to the National Credit Regulator in terms of Section 136, which must refer the complaint to the equality court, if the complaint appears to be valid.
Right to reasons for credit being refused:

62. (1) On request from a consumer, a credit provider must advise the consumer in writing of the dominant reason for-

(a) refusing to enter into a credit agreement with that consumer;

(b) offering the consumer a lower credit limit under a credit facility than applied for by the consumer, or reducing the credit limit under an existing credit facility;

(c) refusing a request from the consumer to increase a credit limit under an existing credit facility; or

(d) refusing to renew an expiring credit card or similar renewable credit facility with that consumer.

62.(2) When responding to a request in terms of subsection (1), a credit provider who has based its decision on an adverse credit report received from a credit bureau must advise the consumer in writing of the name, address and other contact particulars of that credit bureau.

62.(3) On application by a credit provider, the Tribunal may make an order limiting the credit provider’s obligation in terms of this Section if the Tribunal is satisfied that the consumer’s requests for information are frivolous or vexatious.”

BREYTEN POTGIETER

FREQUENTLY ASKED QUESTIONS REHABILITATION

What is the effect of rehabilitation regarding my adverse information on the Credit Bureaus?

The National Credit Act has had the effect of changing the rules of the Credit Bureaus. Before the National Credit Act, the adverse credit information of someone who rehabilitated was carried on the credit Bureaus for 10 years after rehabilitation. The current position is that the moment a person rehabilitates, the adverse credit information (pertaining to debt incurred before sequestration) is supposed to be removed from ITC, Experion etc. The only reference that stays for a period of 5 years is a notice of your rehabilitation.

Who has the responsibility to remove my adverse credit information at the Credit bureaus?

Once the court grants your rehabilitation order, the Registrar of the High Court must despatch a copy of the order to the credit bureaus who must then remove your adverse credit information. The unfortunate situation is that the credit bureau fails or neglects to do their work. When we do our client’s rehabilitation we attend to this. The practical procedure is that we lodge an objection at the credit bureau and we forward the rehabilitation order to the credit bureau along with the objection. According to the rules of the credit bureaus, if no one objects to the removal of your name from the credit bureau within twenty one days, they must remove all adverse information of which the course of action has arisen before the date of your sequestration.

It sometimes happens that a creditor has taken judgement against you after you have been sequestrated. The credit bureaus then refuse to remove the judgements that were taken after sequestration unless we get a letter from the creditor (or their attorneys) in which they state that the cause of action has arisen before sequestration. If this hick-up does occur it sometimes takes us months to clear your name, but the job gets done in the end. Our personnel sometimes spend hours (literally) the phone with the credit bureaus in an effort to get them to do their work. The “clean-up” process is supposed to take at the most thirty days, but sometimes takes as long as three or four months. It is a rather humbling experience to negotiate with someone at the credit bureau who has standard 4 (welding) on his name.

What is the effect of my rehabilitation on my future participation in commerce?

Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

What must the judge consider when granting a Rehabilitation Order?

Whether certain formalities have been met, but essentially whether you are fit and proper to partake fully in the commercial environment.

Which Court has jurisdiction to rehabilitate me?

Only the Court that gave the sequestration order. There are a few exceptions on which we will advise you.

If all my creditors have been paid in full and there is still some money left over, what happens to that money?

Your trustee must pay the money into the guardian fund which falls under control of the Master of the High Court. Once all your creditors have been settled in full, you immediately qualify to bring an application for your rehabilitation. After the Court has granted the rehabilitation order you can collect the money from the guardian fund. Unfortunately in practise it is not that easy. The Masters office has tremendous procedure problems and sometimes it takes us a year to get your money back from the guardian fund. If everything runs smoothly there is no reason why this should not take more than a few days.

Why don’t I simply wait ten years?

Before you can fully and properly partake in commerce you must be rehabilitated. Banks will not allow you to open cheque accounts, credit cards, or to borrow money to purchase a property, car etc. unless you are rehabilitated. The further problem is that, for as long as you are not rehabilitated, every asset that you accumulate during sequestration vests in your insolvent estate.

What is a Vesting Order?

If you have accumulated assets during your sequestration, those assets are deemed to form part of your insolvent estate (Section 24(2)(b) of the Insolvency Act read with Section 123(1)). If you have for example bought a house, you must, when applying for rehabilitation, also ask the court to give an order in terms whereof the property that you have bought vest in your “new” estate. If you have bought for example household furniture and an inexpensive motorcar etc, you don’t need to ask the Court for a Vesting Order because these assets are needed to maintain normal and ordinary lifestyle.

How do I determine whether I qualify for rehabilitation?

Should you contact our offices, we will, for an agreed fee determine whether you qualify for rehabilitation. Should you qualify the fee that we have already charged you is deducted from the fee that we will charge you for the rehabilitation, even if the rehabilitation application can only be brought a few years in future.

What is the banks’ attitude when considering lending money to an insolvent that has been rehabilitated?

In my experience, those banks which lost money in your sequestration are difficult. Banks who were not creditors in your insolvent estate will normally help you. They might want you to go through a “probation” (own term) period, to determine how you deal with accounts they opened for you. My advice is; do not take no for an answer, keep on trying.

Will my application for rehabilitation succeed?
"What does “contribution” mean?

In the winding-up of your estate it might happen that, even though preferent creditors receive a dividend, there is not enough funds to cover the administrative costs of your estate. You must keep in mind that preferent creditors are only obliged to pay the cost of realisation of the asset of which they hold security. They are not obliged to pay the “general administrative cost”. Should there be a shortfall in the “general administrative cost” then each creditor who has proven a claim in your insolvent estate becomes liable for the administrative cost, pro rata to the amount of his claim.

It is important to note that, when you bring an Application for your rehabilitation, you must repay this administrative cost. You must not confuse the contribution towards the shortfall on administrative cost with repayment of old debt. In present terms the contribution can vary from zero to as much as R25,000.00 at the time of your Application for Rehabilitation.

Must I repay my debts before I can apply for rehabilitation?

No. In layman’s terms, when you are sequestrated your debt is written off. None of your old creditors can ever force you to pay back the “old debt”. In legal terms your debt is not written off, it vests in a trustee who must realise the assets and distribute the yield of the sale of the assets amongst creditors in accordance to insolvency act.

What about debt incurred during sequestration?

If you incurred debts after sequestration it does not fall in your insolvent estate and you must simply pay the debt.

Does the National Credit Act have an effect on my position after I have rehabilitated?

Yes indeed. The Act was written in common English and we hereunder quote certain relevant sections of the National Credit Act number 34 of 2005.

Chapter four of the National Credit Act deals with Consumer credit policy – it reads as follows:

“Protection against discrimination in respect of credit:

Section 61(1): Relative to the treatment of any of other consumer or prospective consumer, a credit provider must not unfairly discriminate directly or indirectly against any natural person, juristic person or association of persons on one or more grounds set out in Section 9(3) of the Constitution, or on one or more grounds set out in Chapter 2 of the Promotion of Equality and Prevention of Unfair Discrimination Act, when-

(a) Assessing the ability of the person to meet the obligations of a proposed credit agreement;

(b) Deciding whether to refuse an application to enter into a credit agreement, or to offer or enter into a credit agreement;

(c) Determining any aspect of the cost of a credit agreement, to the consumer;

(d) Proposing or agreeing on the terms and conditions of a credit agreement;

(e) Assessing or requiring compliance by the person with the terms of a credit agreement;

(f) Exercising any right of the credit provider under a credit agreement, this Act or applicable provincial legislation;

(g) determining whether to continue, enforce, seek judgment in respect of or terminate a credit agreement; or

(h) Determining whether to report or reporting any credit information or record.”

Section 61(3) of the Consumer Credit Policy, which reads as follows:

“Subsection (1) and (2) apply in respect of a consumer or prospective consumer that is an association or juristic person to prohibit unfair discrimination against that association or juristic person based on the characteristics of any natural person who is a member, associate, owner, manager, employee, client or customer of that association or juristic person.

Section 61(5) Reads:

A credit provider may determine for itself any scoring or other evaluative mechanism or model to be used in managing, underwriting and pricing credit risk, provided that any such mechanism or model is not founded or structured upon a statistical or other analysis in which the basis of risk categorization, differentiation or assessment is a ground of unfair discrimination prohibited in Section 9(3) of the Constitution.

So far so good. Section 61(5) is problematic. The act states that “…A credit provider may determine for itself any scoring or other evaluative mechanism or model to be used…”, but, in my opinion, to prove that the bank discriminates against you, you only need to prove to Court that the bank has in the past granted finance to any other customer of its customers, which customer was previously sequestrated and has a similar or weaker financial profile than you.

Section 61(6) Reads:

In respect of an alleged contravention of this Section, any person contemplated in Section 20(1) of the Promotion of Equality and Prevention of Unfair Discrimination Act, may either-

  1. institute proceedings before an equality court, in terms of Chapter 4 of the

Promotion of Equality and Prevention of Unfair Discrimination Act; or

  1. make a complaint to the National Credit Regulator in terms of Section 136, which must refer the complaint to the equality court, if the complaint appears to be valid.
Right to reasons for credit being refused:

62. (1) On request from a consumer, a credit provider must advise the consumer in writing of the dominant reason for-

(a) refusing to enter into a credit agreement with that consumer;

(b) offering the consumer a lower credit limit under a credit facility than applied for by the consumer, or reducing the credit limit under an existing credit facility;

(c) refusing a request from the consumer to increase a credit limit under an existing credit facility; or

(d) refusing to renew an expiring credit card or similar renewable credit facility with that consumer.

62.(2) When responding to a request in terms of subsection (1), a credit provider who has based its decision on an adverse credit report received from a credit bureau must advise the consumer in writing of the name, address and other contact particulars of that credit bureau.

62.(3) On application by a credit provider, the Tribunal may make an order limiting the credit provider’s obligation in terms of this Section if the Tribunal is satisfied that the consumer’s requests for information are frivolous or vexatious.”

Director, Attorney, LLB

Johann Pepler

FREQUENTLY ASKED QUESTIONS REHABILITATION

What is the effect of rehabilitation regarding my adverse information on the Credit Bureaus?

The National Credit Act has had the effect of changing the rules of the Credit Bureaus. Before the National Credit Act, the adverse credit information of someone who rehabilitated was carried on the credit Bureaus for 10 years after rehabilitation. The current position is that the moment a person rehabilitates, the adverse credit information (pertaining to debt incurred before sequestration) is supposed to be removed from ITC, Experion etc. The only reference that stays for a period of 5 years is a notice of your rehabilitation.

Who has the responsibility to remove my adverse credit information at the Credit bureaus?

Once the court grants your rehabilitation order, the Registrar of the High Court must despatch a copy of the order to the credit bureaus who must then remove your adverse credit information. The unfortunate situation is that the credit bureau fails or neglects to do their work. When we do our client’s rehabilitation we attend to this. The practical procedure is that we lodge an objection at the credit bureau and we forward the rehabilitation order to the credit bureau along with the objection. According to the rules of the credit bureaus, if no one objects to the removal of your name from the credit bureau within twenty one days, they must remove all adverse information of which the course of action has arisen before the date of your sequestration.

It sometimes happens that a creditor has taken judgement against you after you have been sequestrated. The credit bureaus then refuse to remove the judgements that were taken after sequestration unless we get a letter from the creditor (or their attorneys) in which they state that the cause of action has arisen before sequestration. If this hick-up does occur it sometimes takes us months to clear your name, but the job gets done in the end. Our personnel sometimes spend hours (literally) the phone with the credit bureaus in an effort to get them to do their work. The “clean-up” process is supposed to take at the most thirty days, but sometimes takes as long as three or four months. It is a rather humbling experience to negotiate with someone at the credit bureau who has standard 4 (welding) on his name.

What is the effect of my rehabilitation on my future participation in commerce?

Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

What must the judge consider when granting a Rehabilitation Order?

Whether certain formalities have been met, but essentially whether you are fit and proper to partake fully in the commercial environment.

Which Court has jurisdiction to rehabilitate me?

Only the Court that gave the sequestration order. There are a few exceptions on which we will advise you.

If all my creditors have been paid in full and there is still some money left over, what happens to that money?

Your trustee must pay the money into the guardian fund which falls under control of the Master of the High Court. Once all your creditors have been settled in full, you immediately qualify to bring an application for your rehabilitation. After the Court has granted the rehabilitation order you can collect the money from the guardian fund. Unfortunately in practise it is not that easy. The Masters office has tremendous procedure problems and sometimes it takes us a year to get your money back from the guardian fund. If everything runs smoothly there is no reason why this should not take more than a few days.

Why don’t I simply wait ten years?

Before you can fully and properly partake in commerce you must be rehabilitated. Banks will not allow you to open cheque accounts, credit cards, or to borrow money to purchase a property, car etc. unless you are rehabilitated. The further problem is that, for as long as you are not rehabilitated, every asset that you accumulate during sequestration vests in your insolvent estate.

What is a Vesting Order?

If you have accumulated assets during your sequestration, those assets are deemed to form part of your insolvent estate (Section 24(2)(b) of the Insolvency Act read with Section 123(1)). If you have for example bought a house, you must, when applying for rehabilitation, also ask the court to give an order in terms whereof the property that you have bought vest in your “new” estate. If you have bought for example household furniture and an inexpensive motorcar etc, you don’t need to ask the Court for a Vesting Order because these assets are needed to maintain normal and ordinary lifestyle.

How do I determine whether I qualify for rehabilitation?

Should you contact our offices, we will, for an agreed fee determine whether you qualify for rehabilitation. Should you qualify the fee that we have already charged you is deducted from the fee that we will charge you for the rehabilitation, even if the rehabilitation application can only be brought a few years in future.

What is the banks’ attitude when considering lending money to an insolvent that has been rehabilitated?

In my experience, those banks which lost money in your sequestration are difficult. Banks who were not creditors in your insolvent estate will normally help you. They might want you to go through a “probation” (own term) period, to determine how you deal with accounts they opened for you. My advice is; do not take no for an answer, keep on trying.

Will my application for rehabilitation succeed?
"What does “contribution” mean?

In the winding-up of your estate it might happen that, even though preferent creditors receive a dividend, there is not enough funds to cover the administrative costs of your estate. You must keep in mind that preferent creditors are only obliged to pay the cost of realisation of the asset of which they hold security. They are not obliged to pay the “general administrative cost”. Should there be a shortfall in the “general administrative cost” then each creditor who has proven a claim in your insolvent estate becomes liable for the administrative cost, pro rata to the amount of his claim.

It is important to note that, when you bring an Application for your rehabilitation, you must repay this administrative cost. You must not confuse the contribution towards the shortfall on administrative cost with repayment of old debt. In present terms the contribution can vary from zero to as much as R25,000.00 at the time of your Application for Rehabilitation.

Must I repay my debts before I can apply for rehabilitation?

No. In layman’s terms, when you are sequestrated your debt is written off. None of your old creditors can ever force you to pay back the “old debt”. In legal terms your debt is not written off, it vests in a trustee who must realise the assets and distribute the yield of the sale of the assets amongst creditors in accordance to insolvency act.

What about debt incurred during sequestration?

If you incurred debts after sequestration it does not fall in your insolvent estate and you must simply pay the debt.

Does the National Credit Act have an effect on my position after I have rehabilitated?

Yes indeed. The Act was written in common English and we hereunder quote certain relevant sections of the National Credit Act number 34 of 2005.

Chapter four of the National Credit Act deals with Consumer credit policy – it reads as follows:

“Protection against discrimination in respect of credit:

Section 61(1): Relative to the treatment of any of other consumer or prospective consumer, a credit provider must not unfairly discriminate directly or indirectly against any natural person, juristic person or association of persons on one or more grounds set out in Section 9(3) of the Constitution, or on one or more grounds set out in Chapter 2 of the Promotion of Equality and Prevention of Unfair Discrimination Act, when-

(a) Assessing the ability of the person to meet the obligations of a proposed credit agreement;

(b) Deciding whether to refuse an application to enter into a credit agreement, or to offer or enter into a credit agreement;

(c) Determining any aspect of the cost of a credit agreement, to the consumer;

(d) Proposing or agreeing on the terms and conditions of a credit agreement;

(e) Assessing or requiring compliance by the person with the terms of a credit agreement;

(f) Exercising any right of the credit provider under a credit agreement, this Act or applicable provincial legislation;

(g) determining whether to continue, enforce, seek judgment in respect of or terminate a credit agreement; or

(h) Determining whether to report or reporting any credit information or record.”

Section 61(3) of the Consumer Credit Policy, which reads as follows:

“Subsection (1) and (2) apply in respect of a consumer or prospective consumer that is an association or juristic person to prohibit unfair discrimination against that association or juristic person based on the characteristics of any natural person who is a member, associate, owner, manager, employee, client or customer of that association or juristic person.

Section 61(5) Reads:

A credit provider may determine for itself any scoring or other evaluative mechanism or model to be used in managing, underwriting and pricing credit risk, provided that any such mechanism or model is not founded or structured upon a statistical or other analysis in which the basis of risk categorization, differentiation or assessment is a ground of unfair discrimination prohibited in Section 9(3) of the Constitution.

So far so good. Section 61(5) is problematic. The act states that “…A credit provider may determine for itself any scoring or other evaluative mechanism or model to be used…”, but, in my opinion, to prove that the bank discriminates against you, you only need to prove to Court that the bank has in the past granted finance to any other customer of its customers, which customer was previously sequestrated and has a similar or weaker financial profile than you.

Section 61(6) Reads:

In respect of an alleged contravention of this Section, any person contemplated in Section 20(1) of the Promotion of Equality and Prevention of Unfair Discrimination Act, may either-

  1. institute proceedings before an equality court, in terms of Chapter 4 of the

Promotion of Equality and Prevention of Unfair Discrimination Act; or

  1. make a complaint to the National Credit Regulator in terms of Section 136, which must refer the complaint to the equality court, if the complaint appears to be valid.
Right to reasons for credit being refused:

62. (1) On request from a consumer, a credit provider must advise the consumer in writing of the dominant reason for-

(a) refusing to enter into a credit agreement with that consumer;

(b) offering the consumer a lower credit limit under a credit facility than applied for by the consumer, or reducing the credit limit under an existing credit facility;

(c) refusing a request from the consumer to increase a credit limit under an existing credit facility; or

(d) refusing to renew an expiring credit card or similar renewable credit facility with that consumer.

62.(2) When responding to a request in terms of subsection (1), a credit provider who has based its decision on an adverse credit report received from a credit bureau must advise the consumer in writing of the name, address and other contact particulars of that credit bureau.

62.(3) On application by a credit provider, the Tribunal may make an order limiting the credit provider’s obligation in terms of this Section if the Tribunal is satisfied that the consumer’s requests for information are frivolous or vexatious.”

Attorney, LLB, LLM 

INsolvency Services

WHAT ARE MY OPTIONS?
Voluntary liquidation
Company can't pay its debts? Know all your options including Liquidation. We’ve helped thousands of owners out of debt. feet.
WHAT TO EXPECT?
VOLUNTARY SEQUESTRATION
Are you struggling to pay all your creditors? We can help you stop the debt spiral and explain to you what to expect when you sequestrate.
HOW DO I PROTECT MY FAMILY?
Register a trust for your assets
Want to protect your family and business when you are not around anymore? Know your options. Let's plan and protect your future.
I WANT TO START A COMPANY
Start a new company
Want to start a new business but don't know where to start? We will help you register plan and structure your new business.
HOW DO I CLEAR MY CREDIT RECORD?
INSOLVENCY REHABILITATION
Do you want to buy a house but your credit record shows you are sequestrated? Get a fresh start and clear your credit record.

INsolvency Services

WHAT ARE MY OPTIONS?
Voluntary liquidation
Company can't pay its debts? Know all your options including Liquidation. We’ve helped thousands of owners out of debt. feet.
WHAT TO EXPECT?
VOLUNTARY SEQUESTRATION
Are you struggling to pay all your creditors? We can help you stop the debt spiral and explain to you what to expect when you sequestrate.
HOW DO I CLEAR MY CREDIT RECORD?
INSOLVENCY REHABILITATION
Do you want to buy a house but your credit record shows you are sequestrated? Get a fresh start and clear your credit record.
HOW DO I PROTECT MY ASSETS?
PROTECT YOUR ASSETS
Do you want to protect your assets against unforeseen circumstances like debt, sequestration, divorce or liquidation?
I WANT TO START A COMPANY
Start a new company
Want to start a new business but don't know where to start? We will help you register plan and structure your new business.
HOW DO I PROTECT MY FAMILY?
Register a trust for your assets
Want to protect your family and business when you are not around anymore? Know your options. Let's plan and protect your future.
Liquidation Attorneys Logo

Years of experience

years

Liquidation-Attorneys-Icons-coffee

plenty Cups of Coffee

coffee shared

Liquidation Attorneys Logo

very Happy Clients

clients helped

years of experience

Liquidation-Attorneys-Icons-coffee

Cups of coffee

Happy Clients

OBLIGATION FREE CONSULTATION

Talk to an Insolvency attorneys about your debt problems before you fall further into a financial crisis. We have help thousands of clients out of debt and back on their feet.

Get the right advice you need to get financial peace of mind. We understand that this time can be stressful and therefore we offer our first consultation FREE! This means that you get expert advice and an action plan from one of our attorneys at no cost.  Don’t waste time, get started now. All you need to do is call or email us and our Client Relation Specialist Atri Koen will contact you.

OBLIGATION FREE CONSULTATION

Talk to an Insolvency attorneys about your debt problems before you fall further into a financial crisis. We have help thousands of clients out of debt and back on their feet.

Get the right advice you need to get financial peace of mind. We understand that this time can be stressful and therefore we offer our first consultation FREE!

This means that you get expert advice and an action plan from one of our attorneys at no cost.  Don’t waste time, get started now. All you need to do is call or email us and our Client Relation Specialist Atri Koen will contact you.

Testimonials

With over 12 years of client care, we always put our clients first. Our attorneys have advised thousands of businesses and owners giving them financial peace of mind and a plan for the future. Get Your Life Back on Track and Out of Debt

Ula | Business Owner

5+ Rating review

Fantastic, I’m totally blown away by the level of professionalism and proficiency of Liquidation Attorneys. Thank you for your help and support Breyten and team.

Ula | Business Owner

5+ Rating review

Fantastic, I’m totally blown away by the level of professionalism and proficiency of Liquidation Attorneys. Thank you for your help and support Breyten and team.

Leaveil Raymond | Local Guide

5+ Rating review

Had a most professional experience while dealing with this firm. Very friendly staff and very knowledgeable attorneys. Thanks for the awesome service.

Leaveil Raymond | Local Guide

5+ Rating review

Had a most professional experience while dealing with this firm. Very friendly staff and very knowledgeable attorneys. Thanks for the awesome service.

Liquidation-Attorneys-Icons-clients
Liquidation-Attorneys-Icons-yearspng
Liquidation-Attorneys-Icons-coffee

Testimonials

With over 12 years of client care, we always put our clients first. Our attorneys have advised thousands of businesses and owners giving them financial peace of mind and a plan for the future. Get Your Life Back on Track and Out of Debt

Ula | Business Owner

5+ Rating review

Fantastic, I’m totally blown away by the level of professionalism and proficiency of Liquidation Attorneys. Thank you for your help and support Breyten and team.

Ula | Business Owner

5+ Rating review

Fantastic, I’m totally blown away by the level of professionalism and proficiency of Liquidation Attorneys. Thank you for your help and support Breyten and team.

Leaveil Raymond | Local Guide

5+ Rating review

Had a most professional experience while dealing with this firm. Very friendly staff and very knowledgeable attorneys. Thanks for the awesome service.

Leaveil Raymond | Local Guide

5+ Rating review

Had a most professional experience while dealing with this firm. Very friendly staff and very knowledgeable attorneys. Thanks for the awesome service.