A sequestration application is the legal mechanism, in South Africa, if you want to declare bankruptcy as an individual.
History of Sequestration in South Africa
Sequestration is almost as old as mankind itself. In difficult times the Jews had a law in terms whereof a creditor was obliged to write off a debtor’s debt if the debtor was unable to pay the creditor within a period of seven years. This was known as “the year of grace”. This method of debt relieve was at least structured and civil.
The old Romans were a rough bunch. In the early Roman times, if you could not pay you debt, you would become a slave of the creditor and he was allowed to kill you if he wanted to. What normally happened was that the debtor was killed and his body was cut up in pieces. Each creditor then received a body part. The method behind the madness is that the Romans believed that, should all your body parts not be rested in one grave, your spirit would haunt your family. To prevent your family from being be haunted by this restless soul, they would buy the body parts from the creditors and bury it in one grave.
In terms of the Roman law, the heirs of a deceased person not only inherited his assets, they also inherited the debts. It follows logically that many heirs now became bankrupt themselves. The law did not very much mind the fact that the heir inherited the problem. The heir’s fate was sealed. He was delivered to creditors.
The Romans were however, a clever bunch and they saw a “loop-hole” in the law. So as to ensure that debtor’s children would not inherit his spot of bother, the debtor would free a slave and make the slave his only heir. The poor slave then inherited the insolvency and borne the brunt of the creditors. In later Roman times this practice was abandoned and the debtor was sold as slave without being killed and divided amongst his creditors.
Further developments in the Romans law aimed at removing the debtor from the commercial environment by sequestrating him and protecting creditors from incurring further losses. The debtor’s assets were divided amongst creditors. During this time insolvency was deemed to be a criminal offense.
In modern time the main aim of sequestration is to prevent creditors from incurring further damages. It is interesting to know that only as recent as 1923 (in the matter ex parte Pretorius) it was decided that insolvency is indeed a civil matter and not a criminal offense.
Get immediate answers to your questions
First hour of consultation is FREE