How much does a Bankruptcy Application cost?
FAQs - Bankruptcy in general
Written by Rohan Lamprecht   

Most attorneys' fees vary and some attorneys demand payment of all their fees upfront. The fee structure is influenced by the following factors:

  • The type of application : Voluntary Surrender vs. Forced Sequestration;
  • The size of the estate : Assets involved, valuation costs of the assets, amount of creditors;
  • The Kelly case.

The fees charged for a bankruptcy application will usually amount to R20, 000 to R25, 000, most of which would be recovered from the insolvent estate, once the application is granted. However, because of the time period it takes the Trustee to finalize the administration process, attorneys will require a deposit to utilize towards payment of their disbursements. The required deposit usually varies from law firm to law firm and I will therefore only be dealing with the Fee Structure of Dionne Lamprecht Attorneys.

Type of Application: Voluntary Surrender vs. Forced Sequestration

Speaking only for Dionne Lamprecht Attorneys, a voluntary surrender also known as a voluntary sequestration (where the client request the High Court to be declared bankrupt) is much simpler and less time consuming than a forced sequestration (where a creditor applies to have a debtor declared bankrupt).

Forced sequestrations have a stigma of the bankruptcy process being abused in what is commonly referred to as "friendly sequestrations". A "friendly creditor", usually a friend or family member alleges to have a valid claim against the debtor and applies for the sequestration of the debtor's estate due to non-payment. The sole purpose of these "friendly sequestration" applications is to bypass certain requirements pertaining to voluntary surrender bankruptcy applications. This is done mainly due to a lack of sufficient assets on the debtor's side and because of the fact that the courts are aware of the aforementioned; these applications are scrutinized and dismissed quite often.

However, in certain cases it may be quite possible that such an application will have a better prospect of success, but this occurs very seldom. Forced sequestrations also have additional disadvantages for the Creditor, whom acts as the applicant in the matter. These disadvantages and other factors are therefore only discussed with clients in very special circumstances, on a personal level with regards to their specific application.

The size of the estate: Assets involved, valuation costs of the assets, amount of creditors

With a voluntary surrender for bankruptcy, the deposit payable is calculated on the required asset value of the client's estate.  It is therefore first necessary for us to calculate the minimum amount the client would require in order to successfully file for bankruptcy, which is done absolutely free of charge. Only once this has been done, the deposit payable will be determined according to the tariff scale below. The deposit may be paid in two to three monthly installments, during which time the application will be prepared.

Asset Value

Deposit

R35,000

to

R40,000

=

R5,900

R40,000

to

R50,000

=

R6,100

R50,000

to

R60,000

=

R6,700

R60,000

to

R70,000

=

R7,400

R70,000

to

R80,000

=

R8,500

R80,000

to

Unlimited

=

R9,300

Cape Province

Add additional

R250