MRL3701 Study Unit 20 – Rehabilitation | Questions And Answers Latest {2024- 2025} A+
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AUTOMATIC REHABILITATION AFTER 10 YEARS - Insolvent not rehabilitated by the court within 10 years
from date of sequestration of estate is deemed to be rehabilitated unless the court, on application by
interested person orders otherwise prior to expiry of the 10 year period.
period runs 10 years from provisional sequestration
if court issues an order that insolvent will not be rehabilitated, Registrar must send a copy of the order
to every Registrar of Deeds.
Registrar of deeds must enter a caveat against the transfer of all immovable property or cancellation or
cession of any bond, belonging to or registered in the name of the insolvent.
Caveat remains in force until insolvent is rehabilitated
CIRCUMSTANCES IN WHICH REHABILITATION MAY BE SOUGHT - 1. Composition of not less than 50 cents
in the rand
2. Lapse of the prescribed period after confirmation of the first account
3. no claims proved after 6 months
4. full payment of all proved claims
COMPOSITION OF NOT LESS THAN 50 CENTS IN THE RAND - Insolvent may immediately seek an order of
rehabilitation if he has obtained a certificate from the Master that creditors have accepted an offer of
composition in which payment has been made, or security given, of not less than 50 cents in the rand
for every concurrent claim proved or to be proved against the estate.
If creditor adopt composition which provides less than 50 cents in the rand, insolent may apply for
rehabilitation only on the basis of the lapse of the prescribed period.
, LAPSE OF THE PRESCRIBED PERIOD AFTER CONFIRMATION OF THE FIRST ACCOUNT - Insolvent may apply
for his rehabilitation after 12 months elapsed from the confirmation by the Master of the first account in
the estate subject to:
1. if insolvent's estate has been sequestrated before, period which must elapse before he can apply for
rehabilitation is three years from date of confirmation of the first accounts.
2. if the insolvent has been convicted of a fraudulent set in relation to his insolvency, or of offence under
ss132, ss133, ss134 of the Act,may apply for rehabilitation only after five years elapsed from the date of
his conviction
3. The insolvent may obtain an order of rehabilitation within four years of the date of sequestration only
if Master has recommended that he be rehabilitated.
NO CLAIMS PROVED AFTER SIX MONTHS - Insolvent may apply for rehabilitation after a period of six
months has elapsed from date of sequestration if
1. at the time of making the application no claim has been proved against his estate.
2. he has not been convicted of any fraudulent act in relation to his insolvency, or of any offence under
ss132, 133 & 134 of the Act
3. his estate has not been sequestrated before.
FULL PAYMENT OF ALL PROVED CLAIMS - At any tie after confirmation by the Master of a plan of
distribution providing for the payment in full of all claims proved against the insolvent estate with
interest calculated i.to. the Act and all the costs of sequestration the insolvent may apply for his
rehabilitation. Master must have actually confirmed the required plan,not enough that there has been
no objection to the liquidation and distribution account.
COURTS DISCRETION - Rehabilitation lies solely within the discretion of the court.
Must be exercise judicially and not arbitrarily - court must have sound reason for arriving at its decision.
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