What Does it Mean To Be Declared Insolvent?
In the most basic terms, being declared insolvent means that an individual or company can no longer pay its debts, and that the individual or company’s liabilities exceed their assets. An insolvency lawyer is then tasked to assist in the situation. This may mean that the insolvency lawyer may restructure debts, which means to negotiate repayment agreements with creditors.
If the insolvency lawyer, or insolvency lawyer South Africa, cannot meet a restructuring plan with the creditors either sequestration or liquidation may ensue. It also means that the debtor may not incur further debts and creditors or creditor agencies may cannot pursue the debtor directly. Creditors and creditor agencies will deal with the insolvency lawyer. Naturally this restricts the individual in certain respects as private schools and some real estate agencies conduct credit and affordability checks. As such, sending your kids to a private school, or renting a new home may not be an option. This does not mean that the debtor’s quality of life is permanently effected as, depending on the specific situation, there may be room for rehabilitation, which is the legal process in which one regains legal status as a person who is, or was, not declared insolvent.