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Chris The Lawyer
Chris The Lawyer, Lawyer
Category: New Zealand Law
Satisfied Customers: 19021
Experience:  32 years qualified as a lawyer; LLB, MMgt and FAMINZ.
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Hi - I am looking at going bankrupt over very old debt, (5

Customer Question

Hi - I am looking at going bankrupt over very old debt, (5 years) that resulted in my husband and I loosing our business and he went banckrupt, a lot of the debt came over to me. I tried to pay it back however stopped when we hit rock bottom and are still struggling now all though both employed. We have a house in a trust - 100% mortgage, no equity. I want to do a non asset proceedure to clear this debt as I will never be able to pay it back.
My debt is under $40,000. Would I be able to do this and my house be safe in the trust?
Submitted: 1 year ago.
Category: New Zealand Law
Expert:  Chris The Lawyer replied 1 year ago.

Chris The Lawyer : Hi and welcome. My first response will follow shortly. Please feel free to follow up if anything is not clear.
Chris The Lawyer : This could be an option, but the Official Assignee may ask you to make payments
Chris The Lawyer : From their site,The criteria for entry To enter a NAP you must;have a total amount of debt between $1,000 and $40,000 (excludes Student Loans, Court Fines and Criminal Reparations),have no realisable assets,have no ability to repay any amount towards your debts, andnever previously been in a NAP or been adjudicated bankrupt.A KiwiSaver account is a realisable asset The length of a NAPThe usual term for a NAP is one year although this can be extended by up to 25 working days by the Official Assignee in certain circumstances.
Chris The Lawyer : So the ability to pay something may be an issue. I suggest you ask anyway, and see if the OA will agree.
Customer:

can they take my income?

Chris The Lawyer : Actually in my experience, the Official Assignee are pretty good to deal with and are realistic about this. If your income is modest they may not touch it, but I suspect they may ask, but I am sure it will be less than the creditors. Are your creditors still chasing you?
Chris The Lawyer : The reason I asked that is that the limitation period for debts is 6 years.
Customer:

yes - Inland revenue have sent me a letter, saying they are taking x amount out of my bank. What would you suggest I do?

Chris The Lawyer : Are they your main creditor?
Customer:

plus how long does my $59 give me to ask questions?

Customer:

yes

Chris The Lawyer : until we finish this session.
Chris The Lawyer : So what have IRD said they will claim each week?
Chris The Lawyer : and for how long?
Chris The Lawyer : tax is not covered by limitation periods sadly
Customer:

they sent a letter asking for 20% of my monthly income, the debt is 18000, was 7000 when we first had all the trouble 5 eyars ago, its ,mainly fees.

Customer:

my debts to live (no credit) is all but my income

Chris The Lawyer : You could try for a hardship application
Customer:

i am so fed up with the noose around my neck, can I sit down with the bankruptcy people and have all the info laid out so there are no surprises before I make the decision? or am I better to negitiate with IRD and pay a minimal amount?

Chris The Lawyer : That would be a really good idea
Customer:

which?

Chris The Lawyer : Going to see the Official Assignee and discussing this in detail so they can give you some idea as to whether you qualify and what they would want in contributions
Chris The Lawyer : but at the same time contact IRD and see if you can ask for a hardship write off
Customer:

ok - can I stop them helping themselves to my pay - they have sent a letter to my employer.

Chris The Lawyer : That is harder. If they have sent the deduction letter your employer must comply. So you will need to move fairly quickly
Customer:

ok - I have tried to call the woman as soon as I got the letter, Ill call tomorrow and get the ball rolling.

Customer:

I guess thats it for now, Ill go and see the bankruptcy people and deal with IRD.

Customer:

Thanks for your advice. :)

Chris The Lawyer : Be strong, you will get through this
Customer:

thanks - just a quick one, when reading back over your notes, the other debt once over 6 years is void?

Chris The Lawyer : Unenforcean
Chris The Lawyer : Unenforceable is the correct term but yes
Customer:

ok cool, so IRD is the only concern! thats one bright light - thanks heaps :)

Chris The Lawyer : Death and taxes, the only certainties
Customer:

ha ha typical!!

Chris The Lawyer : A sense of humour is essential to survive
Chris The Lawyer, Lawyer
Category: New Zealand Law
Satisfied Customers: 19021
Experience: 32 years qualified as a lawyer; LLB, MMgt and FAMINZ.
Chris The Lawyer and 3 other New Zealand Law Specialists are ready to help you
Customer: replied 1 year ago.

I followed your advice, and have had my debt wiped by Inland Revenue :D very happy and appreciated his help!

Expert:  Chris The Lawyer replied 1 year ago.
I love good news, thanks for letting me know!
Customer: replied 1 year ago.


Hi Can I ask you another question or do I have to pay more money?

Expert:  Chris The Lawyer replied 1 year ago.
Ask away here
Customer: replied 1 year ago.

Hi again - Now that Im not going bankrupt and IRD have wiped my debt :)


I have to deal with Baycorp. There is a 4500 debt against me, again for the previous business nightmare, they put a judgement on me 2 years ago.... the debt is over 6 years old, but they tell me it is enforceable because of the judgement - they orderd work to take $40 a month, but for some reason work stopped doing that, and I ignored it.


So - my question is - is that true? and as its on my credit history (the only thing) will it stay there for 7 years, or can it be removed.


 

Expert:  Chris The Lawyer replied 1 year ago.
It will stay there for the period they maintain the record, which depends on the credit agency. If they have told you 7 years that sounds right. You can of course clear the debt by payment or even offer a settlement, and the debt will then show as settled in the credit records. That may be the way to clear this. They must show this as settled if they have agreed to settle and you have done so.
Customer: replied 1 year ago.

I am going to pay this as it is the only one left.


I was just annoyed, I would still have it on my credit rating for 7 years post judgement, its a never ending curse. Can that insist on a means test, to decide what I can pay? do I have to show them my finances? it goes into a main office so anyone can look at it?

Expert:  Chris The Lawyer replied 1 year ago.
It becomes a privacy issue! and they must show this as settled. They can show it as a default, but the 7 years starts from the debt being overdue, so they should take this off fairly soon, if it is over 6 years old.
Customer: replied 1 year ago.

Ok - well my goal is to pay them off and get my credit rating back to ok, so I will trudge on and be thankful Ive been thrown a life line from IRD :)


At least I dont have to be bankrupt :)


i have only spoken to Baycorp not any credit agency. Dont spose they would write the debt off...


 


Thanks heaps


 


 

Expert:  Chris The Lawyer replied 1 year ago.
You could talk to the creditor direct, but they would have to agree to tell Baycorp that the debt was settled. After this time they may have forgotten about it.
Customer: replied 1 year ago.

Yes they would have. Tell me whilst your on here - your not off defending the worlds criminals :)? I think this is such a cool service....


It has helped me be strong and deal with this vs hide my head in the sand.


 


Thanks :D


 

Expert:  Chris The Lawyer replied 1 year ago.
I am just a lawyer working in the usual way but with an interesting side to my practice on this site

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