Insolvency in a legal sense is a is a very drastic move, if a person is declared insolvent by the court either through a voluntary application or as a result of an application brought about by creditors a persons rights are severely restricted. You would lose control of your estate, all your assets would be sold and you would become ineligible for numerous activities. Furthermore your credit record would be severely tarnished.
Your estate can be sequestered either through a voluntary application or as a result of an application made by your creditors. All insolvency hearings are conducted in the High Court and as a result this can be an expensive procedure.
As a general rule one should try to avoid insolvency at all costs, and there are other options provided that one takes action soon enough. Debt review can be one of way that people can avoid being declared insolvent and allows you to keep control of your finances and your assets.
For more information of voluntary sequestration.
For more information of compulsory sequestration.