Study Unit 1-4 Flashcards
What is the legal test of insolvency
The debtors liabilities fairly estimated , exceed the assists , fairly valued
What is the common parlance of insolvency
A debtor who cannot pay their debts
What is the purpose of a sequestration order
The purpose of a sequestration order is to fairly distribute of the debtors assets more especially in circumstances that they are insufficient to cover the claims of all creditors
When is a consersus creditor Uhm formed
It is formed after the sequestration order is granted which also means the coming together of the minds . This depicts that the group creditors will enjoy preference over individual creditors
What happens in the events the debtors assets will not be able to cover the costs of sequestration
The sequestration order will not be granted as the creditors will not be able to get anything from the creditors. The sequestration will be a waste of money and time
What qualifies as an estate (5)
An estate that consists of assets and liabilities
An estate that consists of only assets
A joint estate of spouses married in community of property
A separate estate of spouses married out of community of property
A new estate of a debtor whose estate has been sequestrated
Define a debtor
A person or partnership or a persons estate or partnership estate except a body corporate or company that may be liquidated under the laws relating to companies
Why is the onus more straneous in voluntary surrender that if in compulsory sequestration
Vs , the debtor has to satisfy the court that the sequels will be to the advantage of the creditors
Cs , the debtor must show that there are reasons to believe that the sequestration will be to the advantage of the creditors
The debtor will be able to grant information on his financial position
Whereas the creditor will not necessarily have access to such information
To reduce the risk of the debtor using CS to space his liabilities
Give the preliminary formalities (3)
Notice of intention to surrender
Notice to creditors
Lodging of statement of affairs
When does the notice to surrender lapse
It lapses if the court dismissed the application
After 14days of it being lodged
If it is properly withdrawn
The court has the discretion to dismiss the application on the following grounds (5)
The papers weee deficient
The debtor has alterior motives the debtor has failed to fully furnish information relating to financial position
The debtors financial problems will be better dealt with under the NCA
Creditors aren’t pressing for payments and are accepting instalments
What are the requirements for compulsory sequestration
The creditor has claim which entitles him as per section 9(1) to apply for sequestration of the debtors estate
The debtor is insolvent or has committed an act of insolvency
There are reasons to believe that the sequestration will be to the benefit of the creditors
Entitlement in terms of Section 9(1)
A creditor who has a liquidated claim against the debtor which is no less than r100
Two or more creditors who have a liquidated claim against debtor which is no less than R200
A liquidated claim
Monetary claim
Examples of liquidated claim
Delictual claim for theft of fixed amount
A claim subject to a provisional sentence judgment
Goods sold and delivered
