Legal Proceedings & Recovery of Debts

Section 78

Extension of time for payment or compounding of debts due to estate, and arbitration


(1)  The trustee may accept from a debtor of the insolvent estate who is unable to pay his or her debt in full, any reasonable part of the debt in discharge of the whole debt or grant any debtor of the estate an extension of time for the payment of his or her debt in so far as this is compatible with section 91: Provided that if the debt exceeds R2 000, the trustee shall not accept a part of the debt in discharge of the whole debt, unless he or she has been authorised thereto by the creditors of the estate, or if no creditor has proved a claim against the estate, by the Master.

[Sub-s. (1) amended by s. 9 of Act No. 101 of 1983 and substituted by s. 21 of Act No. 20 of 2001.]

(2)  If authorized thereto by the creditors, or if no creditor has proved a claim against the estate, by the Master, the trustee may submit to the determination of arbitrators any dispute concerning the estate or any claim or demand upon the estate, when the opposite party consents to arbitration.

(3)  If authorized thereto by the creditors or if no creditor has proved a claim against the estate, by the Master, the trustee may compromise or admit any claim against the estate, whether liquidated or unliquidated if proof thereof has been duly tendered at a meeting of creditors. When a claim has been so compromised or admitted, or when it has been settled by a judgment of a court, it shall be deemed to have been proved and admitted against the estate in the manner set forth in section forty-four, unless the creditor informs the trustee in writing within seven days of the compromise or admission or judgment that he abandons his claim: Provided that the preceding provisions of this subsection shall not debar the trustee from appealing against such judgment, if authorized thereto by the creditors.

[Sub-s. (3) amended by s. 21 of Act No. 16 of 1943.]