MRL3701
ASSIGNMENT 2 SEMESTER 2 2025
UNIQUE NO.
DUE DATE: 2025
, Insolvency Law
QUESTION:
Discuss the effect that an order of sequestration would have on Bongani. (10
marks)
If the court grants an order for the sequestration of Bongani’s estate, it will have
several legal and practical consequences for him as a debtor in terms of South African
insolvency law.
1. Loss of Control Over Estate:
Bongani will lose control over his estate. His property—comprising all assets
including his flat and motor vehicle—will vest in the Master of the High Court
and subsequently in the appointed trustee of his insolvent estate. This means
Bongani will no longer be entitled to manage, sell, or dispose of any of his
assets.
2. Surrender of Assets:
All assets that Bongani owns at the time of sequestration, as well as any property
he may acquire during the period of insolvency (excluding property protected by
law), will form part of the insolvent estate. His assets (e.g., flat worth R1 250 000
and vehicle worth R200 000) will be sold by the trustee to pay off creditors.
3. Stay of Legal Proceedings:
Once sequestration is granted, all existing legal proceedings against Bongani in
respect of claims that arose before sequestration will be stayed. Creditors may
not institute or proceed with any legal action against him for pre-sequestration
debts unless they follow the procedures in the Insolvency Act 24 of 1936.
4. Creditors’ Claims Must Be Proved:
Flora and the other creditors will need to prove their claims against Bongani’s
estate at a meeting of creditors. The trustee will then distribute the proceeds of
the estate among them in accordance with the Insolvency Act’s provisions.
ASSIGNMENT 2 SEMESTER 2 2025
UNIQUE NO.
DUE DATE: 2025
, Insolvency Law
QUESTION:
Discuss the effect that an order of sequestration would have on Bongani. (10
marks)
If the court grants an order for the sequestration of Bongani’s estate, it will have
several legal and practical consequences for him as a debtor in terms of South African
insolvency law.
1. Loss of Control Over Estate:
Bongani will lose control over his estate. His property—comprising all assets
including his flat and motor vehicle—will vest in the Master of the High Court
and subsequently in the appointed trustee of his insolvent estate. This means
Bongani will no longer be entitled to manage, sell, or dispose of any of his
assets.
2. Surrender of Assets:
All assets that Bongani owns at the time of sequestration, as well as any property
he may acquire during the period of insolvency (excluding property protected by
law), will form part of the insolvent estate. His assets (e.g., flat worth R1 250 000
and vehicle worth R200 000) will be sold by the trustee to pay off creditors.
3. Stay of Legal Proceedings:
Once sequestration is granted, all existing legal proceedings against Bongani in
respect of claims that arose before sequestration will be stayed. Creditors may
not institute or proceed with any legal action against him for pre-sequestration
debts unless they follow the procedures in the Insolvency Act 24 of 1936.
4. Creditors’ Claims Must Be Proved:
Flora and the other creditors will need to prove their claims against Bongani’s
estate at a meeting of creditors. The trustee will then distribute the proceeds of
the estate among them in accordance with the Insolvency Act’s provisions.
