Liquidating personal debt
The Companies Act, Act 71 of 2008, as well as the Close Corporations Act, Act 69 of 1984, place and obligation on the directors of a Company or the members of a Close Corporation to liquidate the entity as soon as the liabilities exceed the assets.
Not only does a voluntary liquidation get rid of the debt, but the liquidation process also works in such a way that it prevents the directors/members to be personally liable for the debt of the company that they did not sign surety for.
If it does, a professional appraisal of assets may be necessary.
All trust creditors must be satisfied before any trust assets are distributed to beneficiaries.
Trust creditors also include tax authorities, and trust income is subject to taxation if it exceeds 0 in any given tax year.
She will also need the title deeds to all titled property owned by the trust – real estate deeds and bank account documents, for example. Normally, these are listed in the trust document or an appendix.
Liquidating does not write off any sureties that the directors or members signed for, but it does write off all other debt.
The business owner can continue with the business if so wanted.
The most important document is the trust document that created the trust – either a living trust document or the decedent’s will.
You have to sign it and, depending on state law, you may have to have it notarized or witnessed.