Insolvency Law

• • Insolvency law is the legislation and statutory guidelines by which an insolvent person must act.
    
    What it means to be insolvent:
    
    A person is insolvent if his/her liabilities, fairly estimated, exceeds his/her assets, fairly valued. It is important to note that there is a difference
    between actual insolvency and commercial insolvency, the latter refers to an inability to pay debts. A company may be solvent on paper but
    have a cash flow problem which renders it unable to pay its debts.
    
    Insolvency proceedings are used as the ultimate form of execution/debt. A creditor who wishes to enforce payment of his claim after judgment
    has a number of remedies:
    
    • Writ of execution;
    
    • Garnishee orders;
    
    • Emoluments Attachment Orders;
    
    • Order of payment of instalments.
    
    The National Credit Act 34 of 2005 contains certain debt relief sections that came into operation on 1 June 2007. It applies to credit agreements
    as defined in Section 8 of the Act. Where a consumer (natural persons only) is in default, the Act provides for relief by way of debt counselling,
    alternative dispute resolution, consumer court or an ombud with jurisdiction.
    
    Sections 134 and 135 of the Act deals with “formal” Alternative Dispute Resolution (ADR) procedure. Once the consumer has commenced with
    the ADR approach in terms of Section 134, it can result in the following:
    
    1. Voluntary arrangement – the National Credit Regulator encourages informal negotiations and agreement to assist the consumer;
    
    2. Consent order in terms of Section 135 – an ombud with jurisdiction, a consumer court or an alternative dispute resolution
    agent assists the parties in resolving the dispute;
    
    3. Rejection Certificate in terms of Section 134(5) – an alternative dispute resolution agent certifies that the process has failed.
    
    
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    Hi, I’m Kailash Pillay, an attorney from the city of Johannesburg. My passion for the law
    stems from a desire to improve upon the lives of the vulnerable who fall prey to a
    corrupt system.
    I studied at the University of Johannesburg where I obtained my Bachelor of Laws
    degree, the starting point to the long journey of becoming a legal practitioner.
    This profession has taught me to persevere through the complexities of the law and to
    continually develop my skills as a legal professional.