Rehabilitation Time Table
Written by Rohan Lamprecht   

In order to assist clients in determining exactly when they will be entitled to apply for the Rehabilitation of their insolvent estate, I have drafted a time table according to my interpretation of Section 124 of the Insolvency Act.

 

At any time

Section 124(1) of the Insolvency Act states that an insolvent may apply for rehabilitation of his or her estate at any time after the Master issued a certificate in terms of Section 119(7) of the Insolvency Act. The certificate serves as confirmation that at least three-fourths (¾) of creditors, who proved claims against the insolvent estate, have accepted a composition for payment of:

  • A dividend of at least 50c in the Rand for all concurrent creditors who proved claims against the insolvent estate; and
  • If such dividends have not been paid, confirms that security for the payment thereof has been given. At any time Section 124(5) of the Insolvency Act states that an insolvent may apply for rehabilitation of his or her estate at any time after the Master confirmed a distribution plan providing for payment of:

1. All claims proved against the insolvent estate, in full; and

2. Interest thereon calculated from the date of sequestration in terms of Section 103(2) ; and

3. All the costs of sequestration.



6 Months

Section 124(3) of the Insolvency Act states that an insolvent who was sequestrated for the fist time may apply for rehabilitation of his or her estate after 6 months have lapsed from the date of sequestration of their estate, provided that:

  • At the time of making the application, no claim has been proved against the insolvent estate; and
  • They have not been convicted of any offences that would result in the application of Section 124(2)(c) of the Insolvency Act.

12 Months

Section 124(2)(a) of the Insolvency Act states that an insolvent who was sequestrated for the fist time may apply for rehabilitation of his or her estate after 12 months have lapsed from the date of confirmation by the Master of the trustee’s first liquidation and distribution account, provided that:

  • They have not been convicted of any offences that would result in the application of Section 124(2)(c) of the Insolvency Act; and
  • At least four years have expired from the date of sequestration, except upon the recommendation of the Master.

3 Years

Section 124(2)(b) of the Insolvency Act states that if an insolvent has been sequestrated previously, he or she may only apply for rehabilitation of their estate after three years have elapsed from the date of confirmation by the Master of the trustee’s first liquidation and distribution account, provided that:



  • They have not been convicted of any offences that would result in the application of Section 124(2)(c) of the Insolvency Act; and
  • At least four years have expired from the date of sequestration, except upon the recommendation of the Master.

5 Years

Section 124(2)(c) of the Insolvency Act applies to any insolvent that was convicted of any fraudulent act in relation to his or her existing or any previous insolvency, or of any offence under Sections 132, 133 or 134 of the Act. Such an insolvent may only apply for rehabilitation after five years have elapsed from the date of conviction.

10 Years

Section 127A(1) of the Insolvency Act stipulates that any insolvent not rehabilitated by court application within 10 years from the date of their sequestration is deemed to be rehabilitated, unless a court orders otherwise upon the application of an interested person. Such an application must be made within the 10-year period.

The rehabilitation in terms of Section 127A (1) is automatic; there are no court procedures, applications or formalities.

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