, MRL3701 Assignment 1 Semester 2 Memo | Due 12 August 2025; 100%
CORRECT AND TRUSTED SOLUTIONS
QUESTION
Thandeka and Owen are married out of community of property. They came to
see you as their legal representative. Their separate businesses were affected by
the COVID-19 pandemic. As a result, their finances have been affected and they
are struggling to make ends meet. They believe it is in their best interests for both
of them to be sequestrated. To save on sequestration costs, they wish to bring
only one application before the court, but to each sequestrate their own estates
in that one application, since they are married out of community of property and
do not have a joint estate.
Answer the following questions based on the facts given above:
a. Briefly explain the purpose of a sequestration order.
(5 marks)
A sequestration order is a legal process in terms of the Insolvency Act
24 of 1936 that declares an individual or a legal person insolvent, and
places their estate under the administration of a trustee, appointed by the
Master of the High Court. The primary purpose of sequestration is not to
punish the debtor, but rather to ensure fair and orderly distribution
of the debtor's assets among all creditors, according to the legal rules
of preference, and to prevent any one creditor from gaining an unfair
advantage over others.
The detailed purposes of a sequestration order are as follows:
1. Protection and Equitable Treatment of Creditors
The main goal of sequestration is to protect the interests of all
creditors by ensuring that the insolvent’s estate is liquidated and
distributed fairly. The process allows for a concursus creditorum
(a coming together of creditors), which prevents a situation where
one or more creditors seize the debtor’s assets for themselves while
others are left unpaid.
CORRECT AND TRUSTED SOLUTIONS
QUESTION
Thandeka and Owen are married out of community of property. They came to
see you as their legal representative. Their separate businesses were affected by
the COVID-19 pandemic. As a result, their finances have been affected and they
are struggling to make ends meet. They believe it is in their best interests for both
of them to be sequestrated. To save on sequestration costs, they wish to bring
only one application before the court, but to each sequestrate their own estates
in that one application, since they are married out of community of property and
do not have a joint estate.
Answer the following questions based on the facts given above:
a. Briefly explain the purpose of a sequestration order.
(5 marks)
A sequestration order is a legal process in terms of the Insolvency Act
24 of 1936 that declares an individual or a legal person insolvent, and
places their estate under the administration of a trustee, appointed by the
Master of the High Court. The primary purpose of sequestration is not to
punish the debtor, but rather to ensure fair and orderly distribution
of the debtor's assets among all creditors, according to the legal rules
of preference, and to prevent any one creditor from gaining an unfair
advantage over others.
The detailed purposes of a sequestration order are as follows:
1. Protection and Equitable Treatment of Creditors
The main goal of sequestration is to protect the interests of all
creditors by ensuring that the insolvent’s estate is liquidated and
distributed fairly. The process allows for a concursus creditorum
(a coming together of creditors), which prevents a situation where
one or more creditors seize the debtor’s assets for themselves while
others are left unpaid.
