Insolvency Act 24 of 1936

The Insolvency Act governs the sequestration of the estates of insolvent natural persons in South Africa. Enacted in 1936, it provides for the declaration of insolvency, the administration of insolvent estates, the realization and distribution of assets, and the rehabilitation of insolvent debtors.

Legal area: Law governing the sequestration of estates and the administration of insolvent debtors’ affairs.

Year enacted: 1936

Full text: https://www.gov.za/documents/south-africa-insolvency-act-24-of-1936

Key Provisions

• Chapter 1: Sequestration of estates, including voluntary and compulsory sequestration
• Chapter 2: Administration of insolvent estates and the role of the trustee
• Chapter 3: Distribution of assets among creditors
• Chapter 4: Rehabilitation of insolvent debtors
• Section 21: Preferent and secured creditors
• Section 124: Rehabilitation after sequestration

Significance

The Insolvency Act is the primary statute governing individual insolvency in South Africa. It has been subject to proposed reform, including the Intention to Make Compromise with Creditors Bill which seeks to modernize the framework for debt relief.