MLR3701
ASSIGNMENT 2
DUE DATE: 9 SEPTEMBER 2025
, MRL3701 Assignment 2 Semester 2 2025
DUE 9 September 2025
QUESTION:
Bongani is experiencing financial difficulty. He has failed to pay his debts over the past
few months, and his liabilities have exceeded his assets since 28 October 2024.
Bongani owes a total of R2 500 000 to his creditors, including Flora to whom he owes
R280 000. Although this debt was due and payable to Flora on 8 January 2024,
Bongani failed to pay the debt. Frustrated by not having been paid back, Flora
undertook an investigation into Bongani’s financial situation. She has established that
Bongani owns a flat valued at R1 250 000 and a motor vehicle valued at R200,000.
Flora is planning to apply for the sequestration of Bongani’s estate.
Assume that the court grants an order for the sequestration of Bongani’s estate.
Discuss the effect that such an order would have on Bongani.
1. Bongani is Legally Declared Insolvent
Although Bongani may have been factually insolvent prior to the order, it is only once
the court grants the sequestration order that he is regarded as an insolvent in law. A
sequestration order is a formal declaration of insolvency, and only then do the
provisions of the Insolvency Act 24 of 1936 begin to apply to Bongani’s estate¹.
1 Insolvency Act 24 of 1936, s 2.
ASSIGNMENT 2
DUE DATE: 9 SEPTEMBER 2025
, MRL3701 Assignment 2 Semester 2 2025
DUE 9 September 2025
QUESTION:
Bongani is experiencing financial difficulty. He has failed to pay his debts over the past
few months, and his liabilities have exceeded his assets since 28 October 2024.
Bongani owes a total of R2 500 000 to his creditors, including Flora to whom he owes
R280 000. Although this debt was due and payable to Flora on 8 January 2024,
Bongani failed to pay the debt. Frustrated by not having been paid back, Flora
undertook an investigation into Bongani’s financial situation. She has established that
Bongani owns a flat valued at R1 250 000 and a motor vehicle valued at R200,000.
Flora is planning to apply for the sequestration of Bongani’s estate.
Assume that the court grants an order for the sequestration of Bongani’s estate.
Discuss the effect that such an order would have on Bongani.
1. Bongani is Legally Declared Insolvent
Although Bongani may have been factually insolvent prior to the order, it is only once
the court grants the sequestration order that he is regarded as an insolvent in law. A
sequestration order is a formal declaration of insolvency, and only then do the
provisions of the Insolvency Act 24 of 1936 begin to apply to Bongani’s estate¹.
1 Insolvency Act 24 of 1936, s 2.
