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Hi, INTRO I thought I would start an online journal about my journey to change our bankruptcy laws, and to end collective corporate bullying of people who are in financial hardship, poverty or who are bankrupt like me. As a bankrupt myself it was truely a shock to learn the truth about what it really means to be in debt in NZ. So I've set upon a mission to change our laws. I believe if I knew the real truth about debt in NZ I would have long ago carved out a more prosporous life for myself. I hope readers, you get some value out of my journey to change our laws. I hope its not too late for you to turn away from debt and towards a better future. The world of debt in NZ is very complex. Its like a giant puzzle made up of many pieces of all shapes and sizes. This journal will be an attempt to put all the pieces together. In the end, we will all see the real picture. It was a shock to discover that the debt collection industry in NZ is also corrupt. The place to fix that is to change our laws. There is a tremendous incentive for lending agencies and government to keep people in debt. They work hand in hand through the unregulated debt collection industries, governments and corporations, to move our money out to the international stock markets. THE ULTIMATE GOAL 1. To change our laws in order to end collective corporate bullying and discrimination against people who are in financial hardship, poverty and those who have formal insolvency procedures against them. THE JOURNEY The journey for me, began 4 years ago when I decided to do something about the debt that I was in. I am bankrupt today because I was unsuccessful in that mission. Thousands are bankrupt in NZ every year. Most are due to creditors bankrupting them through the High Courts like I was. But this journey is not about my story. Its about the steps I am taking to have our laws changed in NZ, so we can take charge of our own lives and live the way we chose without the burden of debt ruining our lives. Being in financial hardship and bankrupt, a lot of our legal and privacy rights are taken away from us. Up to this point in time I have researched, spoken to MP's, community groups and individuals in an effort to understand just how are rights are being violated by the debt collection industry and why we have such very harsh cruel insolvency laws that stand in contrast to our governments values and to even our written laws. Just a few of the pieces of the puzzle starting to fit together. To change our laws will be done just small steps at a time. CONTINUING THE JOURNEY As I've gathered evidence, I'm identifying first what laws that are actually harming people who are bankrupt. That is its easier to see that from my current position. Then I'll create a sort of demographic of different areas and what laws need to be changed. When I became bankrupt, the first thing I was made aware of, was that people in NZ don't actually have a right to hold a bank account in NZ. Banks in NZ do write to their customers and tell them to close their accounts when they become bankrupt. Thankfully most have allowed me to retain my accounts. There are also banks in NZ who will not accept new customers if they have defaults of any sort on their credit reports. As NZ Citizens we don't have an inherent right to hold a bank account in NZ, its up to the individual banks. The law to change is for bankrupts to be able to keep their transactional accounts open with the bank when they become bankrupt. The other law to change is for people who are self employed to be able to continue working without the threat of imprisonment by the official assignee. Because I had no other source of income, I was forced to keep working for 5 weeks with that horrendous threat hanging over me. Eventually I did obtain consent to keep working in the same position I had been in for five years, so I could pay basic living costs. No person should have to be expected to live like that. This week there is a meeting with the Green Party. They will be talking about poverty. I'm going to that meeting to see if I can find a link between debt and poverty. I'll post into this journal every couple of weeks or so. If anyone has any suggestions that will help this campaign, please put your suggestions forward. Ford
Hi, I moved to the UK 2 months ago and have been paying off my NZ credit card debt from there. I have still not found a job though and am struggling to maintain the repayments. It's a lot, maybe $23,000 all up. My question is: If I opt for a NAP from here, what will the OA want from me and are they going to contact my UK bank or potential employers about it? I understand that they have virtually unlimited authority to investigate me in NZ but I really don't want them making life hard for me here. Thanks in advance
Reading the article on the Herald by Diana Clement written in 2011 http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10719561 "Every year thousands of people give up all hope of paying back their debts and petition for bankruptcy or the lesser No Asset Procedure (NAP)." correction - Most bankruptcies are by creditor petition and a substantial number of those creditor petitions are by the IRD. People give up hope because creditors refuse to work with the debtor or they onsell debt to collectors who substantially increase the debt beyond what was originally owed and force payments beyond any budget constraints the debtor has. "You can't manage a business, be a business partner, self-employed or employed by family". correction - you can be self-employed when you are bankrupt. I am. But you need to have permission from the Insolvency Office first. Call me stupid but doesn't a self-employed person manage their own business? Certainly the Official Assignee does nothing to manage my business. "Even once you're discharged or the order is terminated, bankruptcy and the NAP are noted on your credit record for a further four years, which will hamper you from getting credit" Yes that is correct but there are some banks who will still lend you money for a mortgage. And the insolvency office will literally add thousands of dollars in new debt for administering the bankruptcy. The debt clock continues from the day the bankruptcy begins. "Nor does bankruptcy free people from fines, court-ordered reparation, maintenance, child support, student loans and debts based on fraud." Correction - student loan debts do sometimes get written off in a bankruptcy. Mine has been. Its at the discretion of the IRD as to whether they bring forward the loan under the new IRD number. "If your debts are over $40,000 you can't use the NAP" - wrong. The amount is $47,000 according to the insolvency and trustee website. "In the digital era mention of a bankruptcy may remain online for many years on websites such as BDCentral.co.nz, which lists bankruptcies and liquidations of companies" Hmmm - http://www.bdcentral.co.nz looks like a website with articles on insurance. A shame Ms Clement didn't mention that the NZ Gazette which is the publically searchable government paper that lists bankruptcies and NAPs for life. And if the bankruptcy claim is defended in the high court, then the results are also made public for life on the courts webpages. Least we not forget www.insolvencywatch.co.nz which, according to the NZ Police is a credit reporting website. It lists the full name and residential addresses of all bankrupts and NAPs. The owner of that website will also contact and discuss a private individual's bankruptcy with the Official Assignee. "But Official Assignee David Harte points out that the Insolvency and Trustee Service assesses the reasons for bankruptcy." Really?? The statement of affairs form asks the debtor to state why they believe they are in debt (or words to that effect). Certainly the Insolvency and Trustee Service have never assessed the reason for my bankruptcy. Or if they have, they haven't told me about it. Certainly it was not in the files that the OA holds against me. But they do treat bankrupts as criminals, so they will always be looking for fraud and to build a case against the bankrupt so they can bring a claim to the high court if need be and that need will only be if the bankrupt holds substantial cash or assets that the OA can claim. In my opinion its similar to a police prosecution that brings a criminal claim against a defendent who they believe committed a crime. Reading some bankruptcy court cases it seems to be the High Court Judge that determines what the reasons for insolvency are. But those reasons don't play a part in sentencing, nor do they influence the judge's decisions. Or how the bankruptcy progresses. "Over and above that, all customers of a company such as GE Money or even the ASB Bank end up paying for the customers who choose bankruptcy or NAP." Really? So they don't have insurance? Least we not forget that a bankrupt would likely have banked with the bank or held credit cards and have been paying a ton more interest to the bank or lender so the cost to the bank in actual money lost is minimal. I've not seen a drop in banks shareholder payouts due to people becoming bankrupt. What annoys the banks and lenders most, is not the outstanding debt but the fact that the bankrupt will no longer be able to obtain lending for the next three years. That is the real loss of income. Our laws mean the poor bankrupt is forced to wear the bankruptcy burden for the rest of their lives, even though it "takes two to tango" "If you choose that last course of action, get guidance from an accountant or business adviser. " Question. And just how do you suppose a bankrupt is going to pay for an accountant or lawyer. Bankrupts don't get access to legal aid. Bankrupts who have a high networth do use lawyers but it doesn't make a difference to the outcome. But its better to use the money for a lawyer to defend their claims than have to give it to the official assignee who is going to use that money to invest with, which they can do under the insolvency act. And to pay the outrageously priced bankruptcy admin costs, which, during the course of a bankruptcy can be hundreds and thousands of dollars. Bankruptcy is a hugely profitable business for the government. And we are suckers at the other end of it! Ford
Hi I posted earlier about kiwisaver and bankruptcy I still have not had any response from the Guardian Trust. It may be that they don't respond to kiwisaver issues from individual members of the public. I have however had another response from the OA. "If an undischarged bankrupt’s kiwisaver funds remain in their Kiwisaver during the bankruptcy term they are protected from the Official Assignee and are not an asset in bankruptcy. The Official Assignee will not make claim on Kiwisaver funds once you (specific to me) are discharged from bankruptcy or turn 65. If during the term of a bankruptcy an undischarged bankrupt makes an application to withdraw their Kiwisaver under hardship and the application is accepted by the fund provider, on release the Official Assignee could make claim to funds as a bankruptcy asset." So what that means is as long as you don't put significant deposits into kiwisaver or withdraw it under hardship while you are bankrupt then the OA probably won't touch it. Unless they deem you to have purposefully put money in there to divert it from creditors, they can take it. Remember they can look back five years. My advice - speaking as a bankrupt, if you wish to continue with Kiwisaver while bankrupt, don't make any withdrawals under hardship while you are an undischarged bankrupt. Stick to making regular contributions. Be consistant with amounts and deposits into your bank account in general. Anything irregular could be deemed an avoidance to pay creditors. I asked if the OA can disclaim the Kiwisaver but they can't because its not actually deemed an asset in and of itself, however the money withdrawn under hardship is an asset that rests with the OA. If you want the OA to disclaim any assets, so you can keep them you have to apply to the court. Its also worth noting that whatever assets the OA claims over the entire 3 years of bankruptcy, you never get those assets back. So for the time you are undischarged don't accumulate any substantial cash, or anything that can be called an asset. Also its worth knowing (as mentioned in my previous post) that the kiwisaver provider itself does not need to provide the OA with the kiwisaver transactions. The provider itself can actually make a determination as to whether you have been putting money into kiwisaver in lump sums or in amounts that are disproporiately large in relation to the Employer contribution. If it deems you to have been, then it will forward the transactions to the OA. Kiwisaver funds are also assets for the OA if the bankrupt dies whilst undischarged. So there are permitted withdrawals that the OA can take from Kiwisaver. My next mission - student loan debt. The supervisor of the IRD tells me that student loan debt is not written off in a bankruptcy. Instead it is capitalised and transferred to the bankrupts new IRD number! And the Tax Administration Act no longer applies because I am bankrupt.