Liquidation, Sequestration and Rehabilitation
Liquidation is for example where a person or a company stops operating and sells all its assets in order to pay its debts.
Sequestration is the bankruptcy of a natural person, though it can also be applied to a trust. The process entails the surrendering of the natural person’s estate, whereby the person applies to the court to be declared insolvent. Once the court approves the application, a trustee is appointed to manage the distribution of benefits from the sale of assets in the natural person’s estate. The creditors receive the benefits and the person remains sequestrated until an application is made to the court and approved for rehabilitation of the person’s estate and thus financial status.
Rehabilitation is a legal process which happens, in some instances automatically or by order of the High Court of South Africa, whereby the insolvent is relieved of the legal implications of being insolvent and put back into a legal position of someone who is/was not declared insolvent.
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