When is a Debtor “Insolvent”? A Case of Arrear Maintenance Illustrates

KVV Inc Attorneys

Published on: 04/03/2025

If owed maintenance, sequestration can be a powerful debt recovery tool. A recent High Court case highlights this, confirming that even the threat of sequestration can motivate settlement. The judgment emphasizes that paying debts is the best proof of solvency, dismissing arguments of future payment. In this case, a father's failure to pay substantial maintenance arrears, coupled with a "no goods" return, led to his sequestration despite his claims of solvency and debt review. The court prioritized the unpaid maintenance, finding sequestration advantageous to creditors.