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Chris The Lawyer
Chris The Lawyer, Lawyer
Category: New Zealand Law
Satisfied Customers: 22163
Experience:  37 years qualified as a lawyer; LLB, MMgt and FAMINZ.
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There. I left Australia and returned to NZ at the end

Customer Question

Hi there. I left Australia and returned to NZ at the end of 2011 with mental health issues. At the time, I was intending to return to Australia after resolving my health issues. However, this never eventuated and I was left with outstanding debt. I now have debt with an Australian bank and an Australian Finance company totalling approx. AU$40K. I have been contacted recently by debt collectors representing the bank in regards ***** ***** outstanding debt saying they will take court action if payment is not made. I am not in a position to repay this debt and am worried if I make contact to negotiate payment for this portion of debt then the finance company to which I owe most of the money will then contact me demanding payment. I am wondering what they can do from Australia if I am based in NZ. Can they apply for court action to recover the debt? What is likely to happen if I do not respond to their requests? Do I have any options for not repaying this debt? Thank you for your advice
Submitted: 6 months ago.
Category: New Zealand Law
Expert:  Chris The Lawyer replied 6 months ago.
You could apply for bankruptcy in Australia, which would write off the debts. They could try to enforce the debts here, and it is not difficult to transfer a court judgment here. If they did this then you could apply for bankruptcy here and wipe out the debt. I suggest you contact the debt collectors, who can be bullies, and tell them your present position and that if they push you for payment then you will apply for bankruptcy and they will get nothing. If they insist then you may need to do so. Bankruptcy is a process to enable you to make a fresh start and will enable you to remove the stress of the claims. It lasts for three years and you can then start again as your health recovers
Customer: replied 6 months ago.
Thanks for the above information. So to clarify, if I apply for bankruptcy in Australia does this also impact my credit status in NZ i.e. do I also become bankrupt in NZ? And can I apply for bankruptcy in Australia from NZ? If I can apply for bankruptcy in Australia without impacting my NZ status, what is the process and criteria for this? To clarify my current financial situation in NZ - I am currently employed and recieve a weekly wage. My partner and I have combined loans totalling approx $600K. These loans are for the purchase of assets in NZ (houses). The assets are all under my partners name - I am not on the titles at all however the loans have the houses as their security against them. My partner has contributed the deposits on all the assets however I am contributing half share of the weekly loan repayments. I am concerned if I apply for bankruptcy in Australia this will affect the loans I have in NZ and more importantly could impact my partners financial situation. We are coming up 3 years together so I am also wondering if they have any rights to the assets in my partners name due to Relationship Property Law. Thank you.
Expert:  Chris The Lawyer replied 6 months ago.
Bankruptcy only applies to the country where you apply. So if you are bankrupt in Australia this won't apply in New Zealand, but can affect your credit record here because the two countries do share a lot of information. If the assets are in your partners name then the bankruptcy won't affect these, but you may want to consider getting a contracting out agreement to make it clear you have no claim to the properties. If you are bankrupt in Australia they cannot attach your income in New Zealand. So you could carry on as you are at present. If the loans in Australia are also secured against the properties in New Zealand this would be more complicated however. I wasn't sure from your comments. It would be worth seeing a lawyer in person to go though the options with a full explanation.
Customer: replied 6 months ago.
Thanks for advice. The loans in Australia are not secured against the properties in NZ. Can you advise what type of lawyer I would be best to contact? I have tried to talk to a few lawyers about this and none seemed able to help and instead suggested I needed to speak to a lawyer in Australia? If I could see a lawyer in NZ that could assist me with this from here that would be much easier. Looking at the criteria for bankruptcy in Australia, it says you have to live there or be personally present in Australia - is this the case or are lawyers in NZ able to assist with filing a debtors petition from NZ? thank you
Expert:  Chris The Lawyer replied 6 months ago.
Australian bankruptcy law is different in that you have to be there. But if these debt collectors are chasing you you can tell them you reside out of Australia and they cannot bankrupt you here.. They will be persistant but in the end they are unlikely to chase you here because the cost is high and the benfit minimal.
Customer: replied 6 months ago.
Hi. So just to make sure I am clear here -
If I contact them and say I can not pay the debt, or alternatively just don't respond and don't pay the debt within the required timeframes, I am understanding from the above comments that their only avenue for debt recovery would be to try enforce the debt here in NZ and transfer a court judgement to NZ. If this is the case I could then apply for bankruptcy here and wipe the debt. My question is, if they did transfer the court judgement to NZ, is it still Australian bankruptcy I would be applying for, or would it be NZ bankruptcy? If the bankruptcy is still Australian and not NZ then I assume my financial situation in NZ would not be attached to the bankruptcy application. If it is actually applying for NZ bankruptcy, then this would not be an avenue I want to go down. Thanks
Expert:  Chris The Lawyer replied 6 months ago.
If they transfer the debt here, and you became bankrupt, it would become a New Zealand bankruptcy.

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