Surrendering your estate – what you should know:

The surrendering of your estate in terms of the Insolvency Law entails an application instituted in the High Court. This application may be applied for by persons who are no longer able to pay their debts due to circumstances out of their control. We can assist clients, provided that there is advantage to creditors, i.e. immovable property, movable property, etc.

We can assist with three different types of surrenders:
  1. Immovable property surrender
  2. Movable property surrender
  3. Cash surrender
Surrender enables you to live a normal financial life (debt free); where you are not plagued by arrear debts with high interest rates. You will have no more fears that creditors will phone you day and night from ‘private numbers’ and you can answer your calls fearlessly. The Sheriff of the Court may no longer hassle you!

What happens if I am in arrears with my bond re-payments?

(This legal procedure can only be stopped if the arrears on the bond are paid in full or if an application for the surrender of your estate is made; as explained herewith.)

Once you are in arrears the respective financial institution/bank will instruct their attorneys to institute legal action against you. The procedures that they follow are briefly as follows:
  • Summons will be issued in the High Court for re-payment of your full outstanding bond amount.
  • Unless the amount is paid, judgement and a warrant of execution will be issued against you 10 days later. Judgement means that you will be automatically black-listed for 30 years, during which time you would not be able to make any credit or buy another house.
  • You will receive a notice of attachment from the Sheriff of the Court indicating that your house is attached and it is to be sold on execution auction. This takes three to four weeks. This auction is a public event held at the office of the sheriff and is executed without a reserve price, which means that, considering the property market situation at the time, might be bought back by the bondholder for as little as R 100-00. You will also be given 24 hours to vacate the house.
  • You are now liable for the shortfall outstanding, which is likely to amount to hundreds of thousands of Rands. For this outstanding debt they will attach, remove and sell all your remaining assets; for example your furniture.
  • You will then be served with a subpoena by the sheriff to appear in the Debtors Court so that your salary and/or income may be attached or garnished. In other words; you will now be paying for a house that you don’t have anymore, most likely for the rest of your life as this debt still accrues interest.