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Bankruptcy also known as insolvency in South Africa is a legal status where an individual or business cannot repay their existing debts. The law of insolvency in South Africa is primarily governed by the Insolvency Act 24 of 1936. In Saxonwold and elsewhere in South Africa, once the bankruptcy process is completed, the debtor is freed from the burdens of debts.
Proceeding with a bankruptcy can be a complex and stressful process. You might need the assistance of a lawyer to understand your rights, the procedure, evaluate if you are eligible for bankruptcy, help to fill out and file necessary paperwork, and represent you at court hearings. Additionally, a lawyer can advise you on the potential impacts bankruptcy might have on your credit score, work, and personal life.
Local bankruptcy laws in South Africa, including Saxonwold, are contained in the Insolvency Act. The Act has provisions regarding compulsory sequestration, voluntary surrender, rehabilitation, and setting aside of sequestration orders. It's noteworthy to mention that according to the Act, a business or individual is unable to repay debt when they miss one or more repayments to their creditors, and this is enough grounds for a creditor to file for the debtor’s sequestration (bankruptcy).
1. What are my options when declared bankrupt?Once you're declared bankrupt, assets could be sold to repay debts. Alternatively, you could enter into a structured repayment plan. You could also be discharged from debts, depending on circumstances.
2. Who can apply for insolvency?Both individuals and companies can apply for insolvency if they are unable to meet their financial obligations.
3. How long does the process take?Typically, the insolvency process can take several months but this can vary depending on the complexity of the case.
4. Will a bankruptcy filing impact my credit score?Yes, filing for bankruptcy is likely to have a negative impact on your credit score and affect your ability to secure credit in the future.
5. Can I include all debts in bankruptcy?Most debts can be included, but some, like secured debts and student loans, might not be covered.
South Africa's National Credit Regulator (NCR) and The Department of Justice and Constitutional Development provide comprehensive resources related to insolvency.
If you need legal assistance in bankruptcy, the first step is to find and consult with a lawyer practicing in insolvency law. Once you've chosen a lawyer, they will guide you through the process of filing for bankruptcy, including preparing and submitting relevant legal forms and representing you in court if necessary.
