, MRL3701 Assignment 2 Semester 2 Memo | Due 9 September 2025;100%
CORRECT AND TRUSTED SOLUTIONS
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.
(10 marks)
ANSWER:
An order for the sequestration of Bongani’s estate (i.e., declaring him
insolvent) would have far-reaching legal, financial, and personal
consequences. Once the court grants the sequestration order, Bongani’s
estate is placed under the control of a trustee, and various effects unfold
in terms of South African insolvency law, as outlined in the Insolvency
Act 24 of 1936. Below is a comprehensive discussion of the effects of
such an order on Bongani:
1. Surrender of Estate and Loss of Control
Once Bongani is sequestrated, he loses control over all his assets. This
includes not only the assets he owns at the time of sequestration (such as
the flat worth R1 250 000 and motor vehicle worth R200 000), but also
any property or assets he may acquire before rehabilitation. These
assets vest in the Master of the High Court initially and then in the
CORRECT AND TRUSTED SOLUTIONS
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.
(10 marks)
ANSWER:
An order for the sequestration of Bongani’s estate (i.e., declaring him
insolvent) would have far-reaching legal, financial, and personal
consequences. Once the court grants the sequestration order, Bongani’s
estate is placed under the control of a trustee, and various effects unfold
in terms of South African insolvency law, as outlined in the Insolvency
Act 24 of 1936. Below is a comprehensive discussion of the effects of
such an order on Bongani:
1. Surrender of Estate and Loss of Control
Once Bongani is sequestrated, he loses control over all his assets. This
includes not only the assets he owns at the time of sequestration (such as
the flat worth R1 250 000 and motor vehicle worth R200 000), but also
any property or assets he may acquire before rehabilitation. These
assets vest in the Master of the High Court initially and then in the
