Rehabilitation marks the end of sequestration for an insolvent individual and releases them from all disabilities arising from the sequestration. It also discharges all debts owed by the insolvent that were due or had arisen before the sequestration. Rehabilitation is possible if specific requirements are met.
Automatic rehabilitation occurs after ten years from the date of sequestration, subject to certain conditions. In most cases, an application to the High Court is required for rehabilitation. Several factors are considered before the court grants a rehabilitation order, which can happen four years after the estate's sequestration, or earlier in specific circumstances.
Rehabilitation applies only to individuals and not legal entities such as companies. There are various ways an insolvent can qualify for rehabilitation, including automatic rehabilitation after ten years, rehabilitation by the court, the lapse of the prescribed period of the first Liquidation and Distribution account, no claims proved after six months, and full payment of all proved claims.
The court has discretion to grant, postpone, or refuse a rehabilitation application, with the onus on the applicant to demonstrate why they should receive rehabilitation. Honesty and full disclosure are expected from the applicant. For assistance with rehabilitation after sequestration, contact Insolvency Division - Louwrens Koen Attorneys at a cost of R15,000.
