MRL3701 CHAPTER 2 - Voluntary Surrender Exam Questions with Correct Answers

TWO WAYS IN WHICH A DEBTOR'S ESTATE MAY BE SEQUESTRADED Correct Answer 1. The debtor himself (or his agent) may apply to court for acceptance of the surrender of his estate (s3.(1)). - Known as voluntary surrender. 2. A creditor or creditors (or their agent) may apply to court for the sequestration of the debtor's estate (s9(1)). - Compulsory sequestration. WHO MAY APPLY FOR VOLUNTARY SURRENDER Correct Answer 1. Estate of a natural person - If agent applies must be expressly authorised to do so. 2. Estate of a deceased debtor (the executor) 3. Estate of a debtor who is incapable of managing his own affairs. 4. Partnership estate - all the members of the partnership 5. Joint estate of spouses married in community of property REQUIREMENTS FOR SURRENDER - COURT MUST BE SATISFIED Correct Answer 1. The debtor's estate is in fact insolvent 2. the debtor owns realizable property of sufficient value to defray all costs of the sequestration which will be payable out of the free residue of the estate. 3. sequestration will be to the advantage of creditors Certain formalities must have been observed. DEBTORS ESTATE INSOLVENT Correct Answer 1. if amount of total liabilities exceeds the value of all of his assets 2. generally determined by reference to the statement of affairs which he is required to prepare and file 3. Court not bound by valuations in statement