The advantage requirement in sequestration applications : a call for relaxation

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dc.contributor.advisor Roestoff, Melanie en
dc.contributor.postgraduate Asheela, Ndatega Victoria en
dc.date.accessioned 2013-09-07T06:34:07Z
dc.date.available 2013-07-29 en
dc.date.available 2013-09-07T06:34:07Z
dc.date.created 2013-04-18 en
dc.date.issued 2013-07-29 en
dc.date.submitted 2013-07-22 en
dc.description Dissertation (LLM)--University of Pretoria, 2013. en
dc.description.abstract In South African insolvency law, in as much as debt relief measures are contained in three pieces of legislation, a discharge from debt is only available to an insolvent debtor whose estate has been sequestrated and he is eventually rehabilitated. The history of South African insolvency law indicates a developmental change from a ‘harsh creditor-orientated’ approach to a ‘debtor-friendly’ approach. However, the advantage for creditors’ requirement is now firmly embedded in the Insolvency Act 24 of 1936. This requirement is not defined in the Insolvency Act but has been largely interpreted by the courts and stringently applied. It is only once the applicant for the sequestration order has extinguished the burden of proving this requirement, amongst others, will the court exercise its judicial discretion to grant or refuse the order. Consequently, this requirement creates a stumbling block for debtors wishing to use the sequestration process as a debt relief measure and force discharge of their debts on their creditors. The sequestration process is aimed at the advantage of creditors and not the relief of debtors. Overburdened debtors seeking debt relief who cannot prove advantage of creditors are therefore not considered in sequestration applications. However, although debt relief is not a primary object of the Insolvency Act, it is an indirect consequence of the sequestration process when the insolvent debtor is rehabilitated. The Insolvency Act almost deals with every aspect of the different classes of creditors while there is no provision of the different classes of debtors who can and those who cannot prove an advantage to creditors. This serves as an indication that there is an imbalance between creditors’ and debtors’ interests. The study seeks to analyse the effect of the advantage requirement on sequestration applications from a debtor’s perspective. The alternative debt relief measures available to debtors when pursued by their creditors as contained in the Magistrates` Court Act 32 of 1944 and the National Credit Act 34 of 2005 are examined. It is submitted that South Africa does not provide the required sufficient debt relief because the administration orders and debt review in addition to other deficiencies, do not provide debtors with a statutory discharge from debts. The South African Law Reform Commission in the 2000 Insolvency Bill has recommended that the advantage for creditors’ requirement be retained in the new Insolvency Act. In a comparative survey, various legal systems are considered to investigate how the issue of finding a balance between debtors’ and creditors’ interests in insolvency law is dealt with. To accommodate all debtors, it is then submitted that the advantage requirement should not be retained in the Insolvency Act. en
dc.description.availability unrestricted en
dc.description.department Mercantile Law en
dc.identifier.citation Asheela, NV 2012, Sequestration applications : a call for relaxation, LLM dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://hdl.handle.net/2263/26556 > en
dc.identifier.other F13/4/596/gm en
dc.identifier.upetdurl http://upetd.up.ac.za/thesis/available/etd-07222013-124818/ en
dc.identifier.uri http://hdl.handle.net/2263/26556
dc.language.iso en
dc.publisher University of Pretoria en_ZA
dc.rights © 2012 University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria en
dc.subject Compulsory sequestration en
dc.subject Advantage of creditors en
dc.subject Friendly sequestrations en
dc.subject Administration orders en
dc.subject Debt review en
dc.subject Pre-liquidation compositions en
dc.subject Rehabilitation en
dc.subject Discharge en
dc.subject Sequestration en
dc.subject Voluntary surrender en
dc.subject Bankruptcy en
dc.subject Insolvency en
dc.subject UCTD en_US
dc.title The advantage requirement in sequestration applications : a call for relaxation en
dc.type Dissertation en


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