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Chris The Lawyer
Chris The Lawyer, Lawyer
Category: New Zealand Law
Satisfied Customers: 22322
Experience:  37 years qualified as a lawyer; LLB, MMgt and FAMINZ.
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Last Saturday I was served a bankruptcy notice in which I

Customer Question

Good morning,
Last Saturday I was served a bankruptcy notice in which I have 10 working days to respond.
Unfortunately I do not have funds to afford my own lawyer, but the notice, I understand to read that, if I cannot afford to make full payment of the amount the judgement creditor claims,
Option (b) states - you must secure or enter into a new formal agreement with the judgement creditor , or alternatively, obtain the High Courts approval of terms of payment.
The amount owing is for outstanding unpaid lease costs on a business building dating back to the beginning of 2015.
The notice has been issued by the Trustee Company Lawyers.
It includes the unpaid monies, interest, and Costs together with disbursements.
My question is - Is it okay for me to correspond directly to the Judgement Creditors Solicitor in negotiating a payment plan? Or alternatively, is it a better option for me to obtain the High Courts approval of terms of payment?
I look forward to your much appreciate advice
Regards, Sharon
Submitted: 15 days ago.
Category: New Zealand Law
Expert:  Chris The Lawyer replied 15 days ago.

There is no problem with you contacting the judgment creditor's solicitor to discuss a payment plan. They will of course need to get instructions from the judgment creditor as to any proposal. The High Court does not approve or disapprove any terms of payment because the only issue for them, will be whether the judgment creditor wants to proceed on the next step which is the application for bankruptcy.

My suggestion is that you set out your assets and liabilities and your income and make an offer for payment over a period of time. If this is not a large debt, and you can pay this off over 2 to 3 years they are likely to consider the offer. But you should be aware that they don't have to accept any offer of payments, and if you cannot pay, they can proceed to your bankruptcy.

Expert:  Chris The Lawyer replied 15 days ago.

Please let me know if you have any further questions. Sometimes if you have no prospect of paying the debt, and if you do not have any assets, then bankruptcy can be an option because this wipes the debt completely. It will of course affect you for the three-year period of bankruptcy

Customer: replied 15 days ago.
Thankyou for your prompt response, that is helpful information.
Are you meaning that they have the option of saying no to any payment plan if I cannot pay in full immediately and the bankruptcy notice continues.
Would it not be in their best interest to have a payment plan, as the alternative option would mean that they have no repayment at all?
The amount is just on $20,000 - It is not a lot of money - but our incoming earnings are stretched to the limit with rent plus a mortgage on a property that ANZ have secured. We had a retail store in a small town that we closed at the start of 2015, We relocated to Auckland and have had the house rented out to assist our rent which is much more than what we are receiving. The value on the property we own are slowly starting to increase again. Hopefully we may be able to refinance in the next 12 months to repay the likes of. Following the close of our business we have had creditors to repay, finance companies etc. I am aware that payment needs to be made to this particular creditor and keen to get a payment plan in place asap. I will do as you suggest and put to them my statement of position, let them know what I can currently afford to pay and hopefully receive a forthcoming response, and see that we are making tracks to recover ourselves following unfortunate circumstances.
Another question concerning bankruptcy, In the unfortunate circumstance that bankruptcy proceeded - and ANZ have security on our property, How does this affect that property and us personally?
Thanks again,
Sharon
Expert:  Chris The Lawyer replied 15 days ago.

They do have the option of refusing any repayment plan and can insist on payment in full. But try and negotiate, and present a picture that if they bankrupt you, they will get nothing, whereas if you are permitted a payment plan they will get paid. If you do not succeed in negotiating a deal, then the government agency which deals with bankruptcy, he Official Assignee, will place a charge on your house, and possibly sell the property. The ANZ bank is unlikely to take any steps as long as the payments are made on the mortgage. Because they have security for the debt, they will not be concerned.

Customer: replied 15 days ago.
My brother has treated me to Australia at Christmas for a week
Am I still able to travel abroad whilst this bankruptcy notice is in place?
Expert:  Chris The Lawyer replied 15 days ago.

Yes, you can. This notice is the first step in bankruptcy and doesnt affect travel plans

Customer: replied 15 days ago.
Thankyou,
Hopefully, we can get a payment plan sorted and in action within this forthcoming week.
Can I contact you again if questions come up through the day?
Expert:  Chris The Lawyer replied 15 days ago.

Sure, no problem

Customer: replied 14 days ago.
Hi again Chris ,
Would you mind please taking a read of my letter of proposal (detailed below) to the Solicitor and Lawyer acting on behalf of the commercial landlords to whom we still owe the outstanding monies ... ( I have left out names in this instance)
I would much appreciate your feedback.
Thanks
Sharon ...25/11/2016To Whom It May Concern,Re; Bankruptcy Notice between ........This is to confirm I received the above bankruptcy notice served to me on Saturday 19 November 2016.Firstly please make known to your clients, .... Trustee that I acknowledge the outstanding debts owed to them with sincere apologies for the delay in following up repayment of these debts.Following up from when I last received communication from my Lawyer who was at the time in correspondence with you on 6th April 2016 ; He wrote ;
Hi Sharon,
..... have contacted me seeking that you "satisfy [their] client about [your] financial position” and then “enter into a payment arrangement” otherwise their clients will take "enforcement steps” which might include "a bankruptcy application" or "sale of the property through court".
Could I please have your updated instructions.
Regards
......To date I had not actioned this request.
Consequently - please find attached to this email a copy of my current statement of financial positionAs at November 2016
Weekly Expenditure ;Mortgage $588
Rent $620
Rates $50
Electricity $70
Internet $69
Food $280
Petrol $50
Toyota Finance $120
Health Expenses $15
Insurance $35
Vehicle maintenance $20
School costs $40
Clothing $25
Total Expenditure $1982.00Income
Wages $1200.00
Wages $600.00
Rent $220.00
Total Income $2020.00Our assets include ;
Property at Wharekaho Road Whitianga (ANZ Bank security $500,000)
Mazda 2008 Premacy
Toyota 2001 Hi Ace Van (Finance owing to date $3461.40)
Kiwisaver ANZ $3900.00 approx
Kiwisaver ASB $2500.00 approxAs you will see income is still very stretched. Thankfully however we are continuing to make slow but steady ground in recovering from our business closure and unforeseen debt at the beginning of 2015, having relocated with both my husband and I receiving wages from permanent employment.I acknowledge that the sum you request for payment is $23,776.46 with recent costs and interest incurred.To enable an affordable monthly repayment amount commencing immediately to be paid into the .... Trustee Company Ltd account,
I would be most grateful if your clients would review favorably to the following proposal ;For the following 12 months ;
Repayment on Principal, Interest & Costs incurred total $433.33 per month (payable on the 1st of each month)For review in 12 months time - ie 1st December 2017 ;
Repayment in full of debt outstanding to your clients.
Expert:  Chris The Lawyer replied 14 days ago.

That seems pretty good, and is certainly better than they would get if they bankrupted you, so send this to them

Customer: replied 14 days ago.
Thanks, ***** ***** ..
Shall I send the email to the Trustees as well as the Lawyers ?
Expert:  Chris The Lawyer replied 14 days ago.

Yes, that would be useful

Customer: replied 14 days ago.
Can you explain how the payment works on your most helpful advice please?
Expert:  Chris The Lawyer replied 14 days ago.

You would either pay the lawyer or the trustees, usually by automatic payments

Customer: replied 14 days ago.
I'm meaning your time and advice?
Is there a charge for all you have assisted me with today?
Expert:  Chris The Lawyer replied 14 days ago.

You would have logged in your credit card and selected the payment, and that is what is charged. It's not a large sum but I hope this has been a useful service

Customer: replied 14 days ago.
indeed, thankyou very much.
Fingers crossed for a positive outcome.
Enjoy your weekend.
Expert:  Chris The Lawyer replied 14 days ago.

Glad to help

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