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Chris The Lawyer
Chris The Lawyer, Lawyer
Category: New Zealand Law
Satisfied Customers: 22303
Experience:  37 years qualified as a lawyer; LLB, MMgt and FAMINZ.
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This is a New Zealand law question. I am in the process

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This is a New Zealand law question.

I am in the process of bankrupting myself in New Zealand. I have submitted a Draft Statement of Affairs (DSOA).

I presume Draft SOA means it is not yet finalised.

When I submitted the DSOA I did not disclose an additional bank account in my name, with a balance of about $8000 AUD. I have been saving this money for about 3 years with the intention of giving it to my wife. She was to use it to pay for a lease on a dance studio or to buy a new car for her business, whatever she felt would have been most useful at the time. I recently obtained advice from you that said I needed to disclose all of my assets in the world, so I presume I need to inform the Official Assignee of its existence.

Am I liable for a penalty for not disclosing this asset in my DSOA?

Am I able to gift $5000 of the $8000 account to my wife if I do it before the DSOA is finalised? On the page of the DSOA dealing with Assets; it asks the question 'In the past 5 years have you sold, transferred or given away and assets worth more than $5,000? Eg property, motor vehicles.......cash etc? I answered 'no', which is factually correct.

Am I legally able to gift the $5000, still answer the question above 'no' and declare the remaining $3000 to the Insolvency Service.?

Lindsay

christhelawyer :

Hi Welcome to JustAnswer. My first response will follow shortly. Please feel free to follow up if anything is not clear

christhelawyer :

Concealing assets from the Official Assignee is a crime under the Insolvency Act and if you are caught, you will be prosecuted and your wife would be ordered to repay any gift.

christhelawyer :

At the time you filed the application for insolvency, the assets all passed to the Official Assignee and this included the bank account, which happens by operation of the Insolvency Act.

christhelawyer :

So if they find out there could be a problem

christhelawyer :
101Status of bankrupt's property on adjudication




  • (1)On adjudication,—




    • (a)all property (whether in or outside New Zealand) belonging to the bankrupt or vested in the bankrupt vests in the Assignee without the Assignee having to intervene or take any other step in relation to the property, and any rights of the bankrupt in the property are extinguished; and






    • (b)the powers that the bankrupt could have exercised in, over, or in respect of any property (whether in or outside New Zealand) for the bankrupt's own benefit vest in the Assignee.






christhelawyer :
420Offences in relation to property




  • (1)A bankrupt (B) commits an offence if B—




    • (a)conceals or removes any part of B's property—




      • (i)within 2 months immediately before any unsatisfied judgment or order for payment of money is obtained against B; or






      • (ii)at any time after an unsatisfied judgment or order for payment of money is obtained against B; or








    • (b)with intent to defraud B's creditors or any of them, makes, or causes to be made, any gift, delivery, or transfer of, or charge over, B's property.






christhelawyer :
428Penalties for indictable offences by bankrupt




  • A bankrupt who commits an offence under any of sections 419 to 426 is liable on conviction on indictment to imprisonment for a term not exceeding 3 years or to a fine not exceeding $10,000 or both.




Customer:

I assume adjudication has not occurred for me yet so the interest in my property is not yet vested in the Assignee; ref: s101(1)(a) as I am still answering questions for the Assignee regarding the Draft Statement of Affairs. So does this mean my property still vests in me?

Customer:

If so, would this mean I am still able to gift an amount to my wife?

christhelawyer :

If you were to gift the money, and not declare the gift, the Official Assignee has the power to set aside the gift and require her to repay the money. This applies even before the adjudication has occurred so some caution is needed here

Customer:

ok, thanks.

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