Asked by the Customer on 02-10-2019 14:00:48
Question posted in the National Credit Act Law category relating to Gauteng

I am way over indebted (R500000.00.) I work and earn a salary of R23995 .After i paid rent ,medical,insurance, groceries and electricity  I have about R6500 left. My commitments to loans are R25000 a month on and have been using Peters money to pay Paul and now I am stuck. I have no assets in my name and are married ANC. I cannot declare myself bankrupt as I have nothing to apease my creditors. Advise please

Gerrie Olivier

Further information relating to Question:

I have a house registered in my name but when I got divorced the court awarded my ex wife the house.

Posted by Att. Patrick on 02-10-2019 15:19:40

Hi there and thank you for your question,

I am a practicing attorney based in South Africa and I will assist you with your question. Please feel free to ask as many follow up questions in order to clarify your question. If you have a new question, you must please open a new thread.

Your first option is to put yourself into debt review and have a debt review agent review your various credit agreements and negotiate an amended payment schedule to settle your creditors. I'm suggesting this because you are earning a salary and you are actually able to make payments! 

Your other option is to apply to be sequestrated. If you have assets of a little bit more than R40,000 then a High Court will most certainly agree to sequestrate you. That would mean that creditors would receive a dividend of approximately 8c in the Rand. That is enough of a benefit. You do not need the creditors to agree, or sign anything. 

That will mean that the debt is basically written off and you can move forwards with your life and your salary. There is a line which is drawn in the sand and you won't need to use your salary to pay your old debts. 

It will cost you legal fees (maybe R20,000) but if you could borrow that from somebody (or save it up) then you can go the sequestration route and then use your salary to pay back the R20,000 - knowing that you wouldn't need to pay anything towards the R500,000.

If there is a part of the answer which you need more advice on, or clarity please continue in this same thread instead of opening a new question.

Att. Patrick

Please remember this is a dialog if you have follow up questions please use the REPLY button and ask. If I did not answer the question you thought you were asking, please respond with the specific question you wanted answered. I hope you found my answer helpful, and you have finished asking your questions, please click on the GREEN ACCEPT button in order to mark the question as closed.

I will follow that route but to clarify. I got divorced 14 years ago. My wife by High court decree too possession of a town house that is still registered in my name. Once she has paid it up it will revert to her. Will this have any effect on my sequestration.

Posted by Att. Patrick on 07-10-2019 17:04:49

Okay, so that really does depend on the wording of your consent paper. You said in your original question that the house was registered in your name but awarded to your wife in the consent paper.

Now you say that it is still your house, but once she has paid it off, then it will be registered in her name. I'm a little unclear as to what you mean exactly.

If the High Court is clear in the consent paper that your Wife is the owner of the house, then your sequestration won't have any effect on the situation.

However, if the consent paper is vague, it might be an issue.