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Treatment of a Debtor's Home in Insolvency: Comparative Perspectives and Potential Developments in South Africa

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  • This article is based on sections of Lienne Steyn, ‘Statutory Regulation of Forced Sale of the Home in South Africa’ (LLD thesis, University of Pretoria 2012) and is similar to a paper delivered in May 2012 at the INSOL International Academics’ Colloquium, held in Miami, Florida. I gratefully acknowledge financial support provided by my doctoral promoter and supervisor, Professor André Boraine, University of Pretoria, and the College of Law and Management Studies, University of KwaZulu-Natal, which enabled me to participate in the Academics' Colloquium.

Abstract

A debtor's home is frequently a source of conflict between the debtor and his family members and his creditors. Treatment of forced sale of a debtor's home is not uniform. Some legal systems provide for formal, statutory ‘homestead exemptions’ the monetary limits of which are in many cases capped. In a number of jurisdictions, statutory provisions regulating, inter alia, the civil process, family law, bankruptcy law, or the recognition of human rights afford a measure of protection to the debtor and his family. This occurs either through the imposition of procedural requirements before forced sale is allowed or protecting the interest in the home or the occupational rights of a spouse or partner of the debtor against creditors' claims, or by delaying the forced sale of the home in certain circumstances. Recently, in South Africa, recognition by the courts of every person's constitutional right to have access to adequate housing has impacted upon the substantive and procedural requirements for execution against a debtor's home. However, no consideration has been given to whether realisation of an insolvent debtor's home by the trustee of an insolvent estate in terms of the Insolvency Act 24 of 1936 involves similar constitutional imperatives. Consideration of the treatment of a debtor's home, especially in the context of insolvency, in various jurisdictions may provide valuable guidance for future developments in South Africa. Copyright © 2013 INSOL International and John Wiley & Sons, Ltd.

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