Do I need assets to declare bankruptcy?
FAQs - Assets

In order to declare Bankruptcy , the High Court must be convinced that concurrent creditors of your estate will receive a dividend of at least 10c per Rand owed to them, after provision has been made for payment of the secured claims , preferent claims and all the administrative costs of the insolvent estate.

This is done by valuation of assets , by an Appraiser or Professional Valuator for purposes of a forced sale. The assets is therefore valued a minimal values, that would be obtained in the event of it being sold via public auction. These values are usually much lower than the assets' second hand value. Assets will also include recoverable debtors that owe you money or the recoverable portion of any claims you might have against a third party.

If the value of your assets is inadequate to facilitate payment of the required 10c per Rand dividend, the application will fail. However, the asset value may be supplemented by donations from family and friends. These donations may include cash, additional assets, promissory notes or a combination of the aforementioned.

There is also the option, provided the asset value is sufficient to cover payment of administrative to the value of  approximately R25,000, to supplement the additional required value by way of salary forfeiture This obviously increases the risk of the application not being granted and one would therefore need to compensate the creditors for the resulting extended administrative period by way of an increased dividend.

In short, the higher the projected dividend payable to concurrent creditors, the better your chances of the application being accepted, provided that the provisions of Section 4 and 6 of the Insolvency Act have been complied with as well.