Our attorneys regularly update us on the latest legal matters. Here is some information that we believe is valuable and informative. This table outlines the differences between debt counseling and sequestration. Due to the newer legislation around debt counseling, it is currently a far more viable option than sequestration.
Debt
Counseling
|
Sequestration
|
Regulated by
the National Credit Act 34 of 2008
|
Regulated by
the Insolvency Act 24 of 1936
|
Protection
procedure – meant to prevent you from losing your assets whilst paying
debt
|
Procedure that
liquidates all your assets to pay the debt
|
Protects
debtor (you)
|
Protects
creditors (the people that you owe)
|
Creditors
cannot harass you for funds once you are under debt
counseling
|
Creditors can
and will make claims against your estate once insolvency proceedings
are entered
|
Credit
providers receive monthly payment in order to pay off
debt
|
Credit
providers receive funds if assets are sold and if sufficient proceeds
are accumulated from the sale of assets
|
Consumer may
not incur further debt whilst under debt counseling unless it is shown to be affordable
|
Insolvent will
we unable to incur debt or obtain credit for a period of 10-15 years
after obtaining the court order.
|
Does not cause
an actual black listing on your credit report, merely a flag
note
|
Will cause a
blacklisting which will remain on the credit report for a period of
15 years
|
Cheaper
procedure and fees are capped and Regulated by the National Credit
Regulator
|
Costly
procedure as it is involves litigation
|
For further information in this regard, please contact Allison.
These FastFacts are distributed as a matter of courtesy to enlighten all our valued clients of recent and interesting developments in the world of Law by MF ATTORNEYS.
These FastFacts are distributed as a matter of courtesy to enlighten all our valued clients of recent and interesting developments in the world of Law by MF ATTORNEYS.
