Legal Articles

Voluntary Surrender of Assets

Voluntary Surrender of Assets - A Path to Financial Fresh Start

Facing overwhelming debt can feel isolating. If you've reached a point where you can no longer meet your financial obligations, South African law offers a potential solution: Voluntary Surrender of your estate, also known as voluntary sequestration. This legal process allows you to proactively approach the court to declare your insolvency and seek relief.

At VDM Attorneys, we understand the stress and uncertainty that comes with financial difficulties. We can guide you through the complexities of voluntary surrender, ensuring you understand your rights and options every step of the way.

What is Voluntary Surrender?

Voluntary surrender is a formal application made to the High Court by an individual who is unable to pay their debts. Legally, you are considered insolvent when your liabilities (what you owe) exceed your assets (what you own). This process, governed by Section 6 of the Insolvency Act 24 of 1936, allows for a fair distribution of your remaining assets to your creditors.

When Might Voluntary Surrender Be the Right Option?

Voluntary surrender might be a viable option if:

You are Insolvent: Your debts are significantly greater than the value of your assets.
You Cannot Meet Your Financial Obligations: You are unable to make regular payments to your creditors.
There are Sufficient Realisable Assets: Your estate has assets that can be sold to provide a meaningful benefit to your creditors (currently, the requirement is typically a minimum return of around 20 cents in the Rand, after covering the costs of sequestration).

The Voluntary Surrender Process with VDM Attorneys

Navigating the legal procedures of voluntary surrender requires meticulous attention to detail. VDM Attorneys will assist you with every step, including:

Consultation and Assessment We will discuss your financial situation to determine if voluntary surrender is the most appropriate course of action for you.
Drafting the Affidavit We will expertly draft the necessary affidavit explaining your insolvency and the reasons for it.
Preparing Court Documents We will handle the preparation and issuing of all required legal documents at the High Court.
Notice to Creditors and Public We will ensure the publication of the Notice of Surrender in the Government Gazette and a local newspaper within the legally mandated timeframe (no more than 30 days and no less than 14 days before the application date). We will also send copies of the notice to all known creditors, SARS, and relevant trade unions within seven days of publication.
Statement of Affairs We will assist you in preparing a comprehensive Statement of Affairs (Form B), detailing your assets and liabilities, sworn under oath. This document will be available for creditor inspection at the Master's Office.
Court Representation You will not need to appear in court. Our experienced advocates will represent you throughout the application process.
Provisional and Final Orders We will guide you through the process of obtaining a provisional sequestration order, followed by the final sequestration order if no opposition is received from creditors.

Requirements for Voluntary Surrender

For the court to accept your voluntary surrender application, the following key requirements must be met:

Insolvency:Your liabilities must exceed your assets.
Advantage to Creditors The court must be satisfied that the sequestration will be to the advantage of your creditors, meaning they will receive a noticeable dividend from the sale of your assets.
Sufficient Realisable Assets You must possess enough assets that can be sold to cover the costs of the sequestration process and provide the required benefit to creditors.
Compliance with Formalities All statutory procedures and timelines outlined in the Insolvency Act must be strictly adhered to.

Consequences of Voluntary Surrender

Understanding the implications of voluntary surrender is crucial. Here are some key consequences:

Potential Benefits:

Debt Relief You can potentially become debt-free after the sequestration process and subsequent rehabilitation.
Protection from Creditors Once the provisional order is granted, creditors cannot take further legal action against you.
A Fresh Financial Start Voluntary surrender can offer an opportunity to rebuild your financial life without the burden of overwhelming debt.

Important Considerations

Loss of Assets You will lose control of your assets, which will be managed and sold by a court-appointed trustee to pay your creditors. Certain essential items like clothing, bedding, basic household furniture, and tools of trade may be exempt.
Impact on Credit Rating Your credit record will be negatively affected, and you will likely struggle to obtain credit in the future until you are rehabilitated.
Restrictions During the period of sequestration, you will face certain legal restrictions, such as limitations on holding certain positions (e.g., company director) and entering into credit agreements without the trustee's consent.
Impact on Spouse If you are married in community of property, both your estates will be jointly sequestrated. If married out of community of property, your spouse's assets may also be affected, requiring them to prove ownership.

Rehabilitation:

After a period of time or by applying to the court, you can become rehabilitated. Rehabilitation restores your legal standing, removes most of the restrictions of sequestration, and allows you to rebuild your financial life.

How VDM Attorneys Can Help You

Voluntary surrender is a significant legal decision with far-reaching consequences. It is essential to seek expert legal advice to fully understand the process and ensure all requirements are met. VDM Attorneys offers:

Expert Legal Guidance - Our experienced insolvency attorneys will provide you with clear and comprehensive advice tailored to your specific situation.
Professional Handling of Procedures - We will manage all the complex legal and administrative tasks involved in the voluntary surrender process, ensuring compliance with the Insolvency Act.
Dedicated Support - We are committed to providing you with ongoing support and guidance throughout the entire process.

If you are struggling with unmanageable debt and considering voluntary surrender, contact VDM Attorneys today for a confidential consultation. We are here to help you explore your options and navigate the path towards a financial fresh start.

Contact VDM Attorneys today to discuss your situation and explore how voluntary surrender might be the right solution for you.

Posts Tagged 'property lawyers'

We are pleased to present below all posts tagged with 'property lawyers'. If you still can't find what you are looking for, try using the search box.

Attention Property Practitioners! Are You Actually Compliant Or Just Registered?

Posted on 7/15/2025 9:07 AM By Cor van Deventer

The Property Practitioners Act imposes a detailed and enforceable framework for how property practitioners must conduct themselves in practice. It touches everything from how records are stored and how deals are marketed, to who you can work with and what happens if you get it wrong.

Can an Estate Agent Claim Commission If They're Not Named in the Sale Agreement?

Posted on 7/11/2025 5:24 PM By Cor van Deventer

A recent judgment handed down by the Western Cape High Court has brought much-needed clarity to a question that estate agents, sellers, and property attorneys frequently encounter: Can a party claim commission simply because they facilitated a sale — even if they're not named in the signed sale agreement?

Is a 99-Year Lease Really Ownership? Waterfall Estate’s Unique Leasehold Model

Posted on 7/10/2025 2:53 PM By Cor van Deventer

Waterfall Estate operates on a 99-year leasehold system — but unlike a standard fixed-term lease, this agreement is automatically renewable, making it a far more stable and enduring arrangement than the term might initially suggest. Under this model, residents do not purchase the land itself. Instead, they acquire a long-term leasehold right to occupy and use the property for a 99-year period.

No Certificate, No Commission – Why FFC Compliance is a Must

Posted on 7/9/2025 4:13 PM By Cor van Deventer

Under South African law, estate agents and property practitioners are held to strict compliance standards — especially when it comes to their entitlement to commission. One of the most critical of these requirements is holding a valid Fidelity Fund Certificate at the time of performing any estate agency service.

What is the Difference Between Consolidation and Notarial Tie?

Posted on 7/7/2025 12:47 PM By Cor van Deventer

A notarial tie is a restriction registered against two or more properties, binding them together without merging their titles. Consolidation, by contrast, physically combines the properties into a single erf with one title deed. Although both are used to satisfy zoning or planning conditions, each carries distinct consequences for ownership, development, and future transactions.

Vat or Transfer Duty? Which Do You Pay When Buying from a Developer?

Posted on 6/26/2025 8:32 AM By Cor van Deventer

Transfer duty is a tax levied by the South African Revenue Service (SARS) on the acquisition of fixed property when the seller is not a VAT vendor. Transfer duty must be paid before the property can be registered in the buyer’s name, and proof of payment is submitted to the Deeds Office during the transfer process.

Mandatory Disclosure Forms Under Section 67 of the Property Practitioners Act

Posted on 6/19/2025 8:51 AM By Cor van Deventer

Section 67 of the Property Practitioners Act is not a guideline. It is a hard legal line. It states that no mandate may be accepted by a property practitioner unless the seller or landlord has first provided a completed and signed disclosure form. Despite this, many in the property industry continue to treat disclosure as an administrative afterthought — or worse, a courtesy that can be skipped if inconvenient.

Spoliation in South Africa – What There is to Know

Posted on 6/18/2025 8:17 AM By Cor van Deventer

Spoliation is one of those legal concepts that often surfaces during disputes over possession — especially in property, residential, and commercial contexts. It deals with a very specific scenario: when someone takes the law into their own hands and unlawfully deprives another of possession of property, without going through the proper legal channels.

Let VDM Attorneys Help You Stay Compliant with Your FFC Renewal

Posted on 6/17/2025 2:05 PM By Cor van Deventer

The Property Practitioners Regulatory Authority (PPRA) requires that FFCs be renewed every three years by 31 October. Missing this deadline can lead to compliance issues and disrupt your operations. At VDM Attorneys, we understand how time-consuming and frustrating it can be to navigate the renewal process, from paperwork to long queues at the PPRA.

Documents for Sectional Title Development in South Africa

Posted on 6/16/2025 12:48 PM By Cor van Deventer

The obligation for developers to hand over specific documents at the first general meeting is set out in the Sectional Titles Schemes Management Act (STSMA) and the Prescribed Management Rules (PMRs). These rules are not optional; they exist to ensure continuity, transparency, and accountability from the outset of the scheme’s life.

Pages: Previous12 Next Return Top