MRL3701 - Insolvency Law
Assignment 2 (Semester 2)
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. (10 marks)
ANSWER:
The Effect of a Sequestration Order on Bongani
Sequestration is the legal process by which a debtor’s estate is declared insolvent and
placed under the administration of a trustee for the benefit of creditors. In Bongani’s
case, once the court grants the sequestration order, his estate no longer vests in him
but in the trustee. This has significant consequences for his property rights, financial
capacity, and legal status (Insolvency Act 24 of 1936).
Disclaimer:
All materials are for study assistance only. We do not condone academic dishonesty. Use at your own risk.
We are not liable for any consequences arising from misuse.
Redistribution, resale, or sharing without permission is prohibited.
Assignment 2 (Semester 2)
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. (10 marks)
ANSWER:
The Effect of a Sequestration Order on Bongani
Sequestration is the legal process by which a debtor’s estate is declared insolvent and
placed under the administration of a trustee for the benefit of creditors. In Bongani’s
case, once the court grants the sequestration order, his estate no longer vests in him
but in the trustee. This has significant consequences for his property rights, financial
capacity, and legal status (Insolvency Act 24 of 1936).
Disclaimer:
All materials are for study assistance only. We do not condone academic dishonesty. Use at your own risk.
We are not liable for any consequences arising from misuse.
Redistribution, resale, or sharing without permission is prohibited.
