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Sequestration
Your Absolute Last Defence against Creditors
In the current economic climate many people are taking severe financial strain. People who were in good financial state not too long ago are struggling to keep their heads above water. Some people are so far in debt that sequestration is their only option.
Personal circumstances can change over night, when there is a loss in a breadwinner’s job, business failure, divorce, death in family or loss of job due to ill health. Or maybe you have just taken on more debt than you could handle and you have a drop in personal cash flow to service the debt.
The only option that many people have is to apply for voluntary sequestration. Applying for voluntary sequestration is a decision not to be taken lightly due to the long lasting financial affect on the individual. But voluntary sequestration can be the only way to make a final break from your debt and your creditors.
What is Sequestration?
Sequestration is sometimes referred to as bankruptcy, insolvency or liquidation. The actual term that people are referring to is Voluntary Sequestration. Voluntary Sequestration is when a person applies at the court to surrender all his assets to creditors. There is no other alternative to repay creditors and the customer has no other option but apply for sequestration.
The court will grant voluntary sequestrations to customer. The court will appoint an Administrator or Trustee who will be in control of your estate. The customer will surrender all assets to administrator. All assets will be sold by Administrator. Cost will be subtracted and the rest will be divided between all creditors. Any balance left on the account of the customer will be written off by creditor. Creditor may not pursue customer anymore.
This is the biggest advantages of sequestration. The customer will come out clean with no debt at the end of the process. The customer will have a clean start in live. No creditor or debt collector may call you for outstanding money again. For many people this is a great option to get rid of all the creditor calls and sleepless nights from worrying about your debt.
Bankruptcy is a term that describes the financial state of an individual or company in legal terms. A person is bankrupt when his liabilities exceed his assets.
Insolvency is the financial term that accountants will use to describe the fact that a person or company’s liabilities exceed their assets and has no cash flow to pay for monthly expenses.
Liquidation is when a company surrenders all the assets to creditors. Liquidation is when all assets is sold or liquidated to cash to repay creditors.
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