Voluntary Surrender of Estate
The surrender of your estate is a legal process initiated by the Courts to assist individuals who are no longer able to meet their financial obligations due to unforeseen circumstances, while allowing you to retain some of your assets.
Voluntary surrender offers the opportunity to restore order to your financial affairs, enabling you to adjust your lifestyle to align with your income. With this process, your financial matters will be addressed by the High Court, providing you with legal protection and peace of mind. You will no longer face relentless calls from creditors, and the constant fear of a visit from the Sheriff attempting to seize your belongings will be alleviated.
Most important: FINANCIAL FREEDOM – NO MORE SLEEPLESS NIGHTS – you and your family can start afresh, a new beginning. You do not have to be afraid of unknown numbers on your mobile. It is better to face a problem and sort it out rather than run away from it. It will not disappear.
ADVANTAGES OF SURRENDERING YOUR ESTATE:
Your salary and other sources of income remain entirely yours, and you are no longer required to pay your creditors. All debts that were part of your Voluntary Surrender of Estate are forgiven.
Only your creditors will be notified of the process; your employer or anyone else will not be informed, ensuring your employment remains secure.
There is no need for you to attend court.
The curator may work with your financial institution (bank) to arrange for you to keep your vehicle, and if your payments are up to date, a lease agreement may be established (final approval rests with the financial institution).
You and your family will adapt to living debt-free, gaining a clear understanding of the difference between “needs” and “wants.” Many of our clients, in fact, choose not to apply for Rehabilitation, as they are content with their new debt-free lifestyle.
DISADVANTAGES OF SURRENDERING YOUR ESTATE:
You will remain insolvent for a minimum of the next four years, during which time you will not be considered creditworthy. After twelve months, you may request permission from your curator to purchase a vehicle. This approval will depend on a record of consistent monthly payments made to the curator. Please note that the financial institution may require a guarantor and will have the final decision on your loan application. Approval is not guaranteed and is subject to their discretion.
Your bank accounts will be restricted to a savings account. You will not be permitted to have a checking account or a credit card. Additionally, you are prohibited from entering into any debt agreements during this period.
Your name will only be cleared upon the successful submission of a Rehabilitation Application, typically filed four years after the court date of your Voluntary Surrender of Estate. In exceptional cases, rehabilitation may be possible after 24 months, but this is not the standard procedure.
A short summary of the procedure:
with NO Property or Vehicle financed on your name:
We will publish an advertisement in the Government Gazette and local newspapers to prevent further legal actions against you, including execution orders and the seizure of your movable assets.
A Statement of Debtor’s Affairs, outlining all your debts, will be prepared for your signature before a Commissioner of Oaths. This document will be submitted for inspection by the Master of the High Court for 14 days and/or filed with the local Magistrate. It is crucial to provide an accurate and complete list of all your creditors to avoid unnecessary embarrassment or complications after Voluntary Surrender of Estate.
A registered letter will be sent to each of your creditors informing them of the surrender of your estate. Creditors may contact our office for further details, and you will also receive a copy of this letter to assist with any communications from persistent creditors.
The South African Revenue Service (SARS) will be notified, even if you are not registered with them.
A founding affidavit will be drafted, detailing your personal circumstances and the reasons for your financial situation. This affidavit will also include recent statements of all outstanding accounts.
At the court hearing, an advocate will present your application on your behalf, and there is no need for you to attend in person. We will inform you of the court’s decision.
Once the application is approved by the High Court, the Master of the High Court will appoint a curator to manage your financial matters. The curator will contact you to arrange a consultation to explain the next steps. If you are located outside of Gauteng, or in Mpumalanga, North West, Limpopo, KwaZulu Natal, Free state, Western Cape, Eastern Cape, or Northen Cape a telephonic consultation will be arranged.
According to the Court Rules, you are required to pay an agreed percentage of your debt to your creditors. This percentage varies by province.
Sample Payment Structure:
with NO Property of Vehicle financed on your name:
For example, if your total debt amounts to R300,000, you may only need to pay R100,000. The fixed fee, which covers attorney and curator costs, is included in the payable amount, ensuring you won’t face unexpected additional fees. The advantage of this legal process is that no interest will accrue on the repayment. For instance, if you owe R500 000,00 you could repay R168 000.00 in monthly instalments of R7000.00 over 24 months—without additional interest or charges. T’s & C’s will apply.
Voluntary Surrender of Estate with Property or Vehicle financed on you name and you are way behind on both we can still help you contact our office for more information.
What happens to a Vehicle:
Hire Purchase agreements are part of your application for Voluntary Surrender of Estate. Arrangements to keep your vehicle need to be made with the financial institution prior to a Voluntary Surrender of Estate application. If your vehicle is under hire purchase, the Rules of Court stipulate that any bank may repossess the vehicle.
Should the instalments on the vehicle be up to date, financial institutions are willing to consider your request to keep the vehicle more favourably. This is often accepted but there is no guarantee that you will be able to keep the vehicle, even if the instalments are up to date.
Lease agreements where a residual payment is required, do not form part of your Voluntary Surrender of Estate application.
Vehicles paid by you but registered in another person’s name will not form part of the estate.
Immovable Property
If your property has already been scheduled for auction, it is of utmost urgency to proceed with the application for Voluntary Surrender of Estate. All legal action will cease as soon as the notice is published in the Government Gazette.
A valuator will contact you to make an appointment to evaluate your property.
The Master of the High Court appoints a Curator after your Voluntary Surrender of Estate was granted. The Curator normally attempts to sell the property to ensure a better selling price and will appoint an agent to market your property. The appointed agent is very professional and will take your needs into consideration.
You may occupy the property until the Curator is appointed. You have to pay municipality bills to avoid a “blackout”. We will need a copy of the last municipal account to lodge your application for Voluntary Surrender of Estate.
The curator will give you 30 days to vacate the property after the selling date. It will not be advisable to vacate the property before then as a property sells easier while occupied. This will also minimize vandalism and unnecessary costs to the insolvent estate.
If the property is sold for less than the bond amount, you will not be held responsible for the short fall. That means if the bond is R1million and the property is sold for R800 000.00 the difference will be written off. Remember you are declared insolvent and will not be liable for the losses.
If you need more information towards Voluntary Surrender of Estate:
Please contact our Head office 012 654 0107 to schedule an appointment.
