Legal Articles and Guides

The Western Cape High Court has blown the lid off a practice which sees attorneys charge hefty fees to lodge batches of standardised, unopposed voluntary surrender (forced sequestration) applications in instances where they could have offered better solutions to their debt-ridden clients, says a report in The Sunday Independent. Judge Lee Bozalek estimated that one firm must have been taking around 80 applications a month to court. ‘The same valuator and the same method of valuation has been utilised in each case, and more than adequate provision has been made for the attorneys’ fee, including minor disbursements, in amounts ranging between R14 000 and R15 000,’ he said. He expressed his concerns in a recent judgment handed down in several separately-lodged applications for volun tary surrender, but it wasn’t the first time he had raised the issue. ‘Very little, it seems to me, if anything, has changed, and these applications are still being brought in significant numbers,’ he said. The Debt Counsellors Association of SA described the practice as an exploitation of the Sequestration Act. Association president Paul Slot said sequestrations were costly, and not the best option for consumers with small amounts of debt and no major assets.There are three options open to consumers who find themselves trapped in debt – sequestration, administration and debt review. The best option was debt review, although it was the one used the least.