Stop Sequestration. Stop Liquidation. Protect your Rights & Home.
When a creditor uses insolvency as a first resort to force payment or reach your property, the law is on your side — and we help you fight it.legal protection against property sales and vehicle repossession.
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When a bank moves to sequestrate you — or liquidate the company that holds your home — as a first resort, that is an abuse of process.
Sequestration and liquidation were never meant to be debt-collection tools. The courts have said so for decades. If a creditor is using insolvency to force payment or to reach a property, you have real, established grounds to fight back — and the law leans in your favour.
Two different processes — one shared scare tactic.
Sequestration is the process used to declare a natural person insolvent under the Insolvency Act. Liquidation (winding-up) is the equivalent for a company or close corporation under the Companies Act 61 of 1973. Both are drastic, both carry heavy stigma — and increasingly, creditors reach for them not as a last resort, but as a first one: a pressure tactic, or a shortcut to a home held inside a company. The threat alone is frightening, which is exactly why it gets misused.
These are not debt-collection mechanisms.
Our courts have been consistent: sequestration is not akin to an ordinary judgment that simply lets a creditor execute against a debtor. Its purpose is to set the statutory insolvency machinery in motion for the benefit of creditors as a whole — not to squeeze one person into paying. For companies, the principle is just as firm.
The leading authority is the Badenhorst rule — from Badenhorst v Northern Construction Enterprises (Pty) Ltd 1956 (2) SA 346 (T) — which holds that winding-up must not be used to enforce a debt whose existence is genuinely disputed on reasonable grounds. The Supreme Court of Appeal confirmed this approach in Afgri Operations Ltd v Hamba Fleet (Pty) Ltd 2022 (1) SA 91 (SCA). Where a debt is properly in dispute, the creditor's remedy is an ordinary court action — not insolvency.
The four patterns we see most.
First resort, not last
Reaching for insolvency to skip the ordinary summons, judgment and execution route — and the consumer protections that come with it under the National Credit Act.
Pressure & leverage
The threat itself — the stigma of insolvency, the "bomb" of a winding-up — used to force payment of a disputed or inflated amount before anyone tests the claim.
Reaching a home inside a company
Liquidating a property-holding company to get at the house — bypassing the judicial oversight and reserve-price protections (Rule 46A) that apply to an ordinary home repossession.
Pushing on a disputed debt
Driving sequestration or liquidation where the debt is genuinely contested — precisely the situation the courts say belongs in action proceedings, not insolvency.
What the law gives you.
The debt is genuinely disputed
If you dispute the debt on bona fide and reasonable grounds, the Badenhorst rule applies: the matter belongs in an ordinary action, and the liquidation or sequestration application can be dismissed.
No advantage to creditors
A compulsory sequestration must show a real benefit to the general body of creditors — a meaningful dividend, not just one creditor chasing payment. Where that benefit can't be shown, the application fails.
Abuse of process / ulterior purpose
Where the process is used for a purpose other than its proper one, the courts will not allow it — a point illustrated in Ex Parte Snooke 2014 (5) SA 426 (FB).
The proper remedy lies elsewhere
Ordinary action and execution carry built-in protections — judicial oversight and a court-set reserve price for a primary home (Rule 46A). Insolvency must not be used to sidestep them.
Procedural defects
The formal requirements — including a valid Section 345 demand for companies — must be properly met. Defects can be fatal to the application.
Been served with a sequestration or liquidation application?
These applications move fast and the dates matter. The sooner it's reviewed, the stronger your position. Send us the papers and we'll tell you, honestly, where you stand.
We act for you — never for the banks.
20+ years, one focus
Two decades specialising in consumer credit defence — we know how these applications are built, and how they fall apart.
An honest opinion first
If insolvency defence isn't your best route, we'll tell you and point you to a better one. We turn away matters where the spend won't help.
The right hands on litigation
CCL is a specialist consultancy. Where court litigation is required, it's conducted by our independent affiliate attorneys.
Sequestration & liquidation, in plain terms.
Don't let an abuse of process take your home.
If a creditor is using sequestration or liquidation as a first resort, the law has answers — and the clock is already running. Let's review your papers today.