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Consumer rights & money

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When you can’t pay your debts: Bankruptcy and other options

The no-asset procedure

What is the no-asset procedure?

Insolvency Act 2006, s 377; Insolvency Act 2006, Part 5, subpart 4

The no-asset procedure is an alternative to bankruptcy. The procedure gives you protection from creditors that is similar, but not identical, to the protection given to you by bankruptcy. It is a one-off opportunity for you to sort out your financial affairs and get back on your feet without entering formal bankruptcy. It usually lasts 12 months instead of the normal three year period for bankruptcy.

Who can apply for the no-asset procedure?

Insolvency Act 2006, s 363

You will be eligible to enter into the no-asset procedure if you:

  • have no property you can sell to make money (“no realisable assets”) – this excludes a motor vehicle up to a value of $6,500 tools for work and essential personal and household effects)
  • have never been through the no-asset procedure
  • have never been bankrupt
  • have debts of between $1,000 and $50,000 (not counting your student loan, maintenance owing under the Family Proceedings Act and child support owing under the Child Support Act)
  • cannot repay any of your debts
  • any of your creditors would not receive much more if you were made bankrupt instead.

You may not be eligible if:

  • you have concealed assets with the intention of defrauding creditors
  • you incurred a debt knowing you did not have the means to repay it
  • a creditor objects
  • a creditor has begun the process to put you into bankruptcy, and it is likely that the outcome for the creditor will be much better if you are made bankrupt.

How do I apply for the no-asset procedure?

Insolvency Act 2006, s 362

A debtor can apply for the no-asset procedure by filing an application and a statement of affairs with the Official Assignee. This can be done online.

What are the advantages of the no-asset procedure?

Insolvency Act 2006, ss 369, 377

Most of the unsecured debts of the person are wiped. Unlike bankruptcy, this does not include a student loan.

The procedure usually lasts for a period of 12 months. By comparison, bankruptcy usually lasts for three years.

What are the disadvantages of the no-asset procedure?

Insolvency Act 2006, ss 366–371

The debtor still has to pay certain debts – court fines, child support, maintenance orders, student loans and debts with secured creditors.

The debtor cannot get credit for more than $1,000 without first informing the credit provider that the debtor is subject to the no-asset procedure. (Between applying and becoming subject to the no-asset procedure, the limit is $100.)

The names of people subject to a no-asset procedure are published in their local newspaper and the New Zealand Gazette and are also recorded on a public register on the Insolvency and Trustee Service website.

Next Section | Debt repayment orders

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Credit and debt

Where to go for more support

Community Law


Your local Community Law Centre can provide free initial legal advice and information.

Consumer Protection


Consumer Protection helpline: 0508 426 678 (0508 4 CONSUMER)

Email: cpinfo@mbie.govt.nz

The Consumer Protection website has useful information on a range of consumer topics. Consumer Protection is part of the Ministry of Business, Innovation and Employment (MBIE).



Phone: 0800 345 123

Email: help@moneytalks.co.nz

MoneyTalks provides free, confidential budgeting support. They can pair you with a financial mentor to help you if you are struggling with debt or need advice on budgeting.



Phone: 0800 345 123

Email: kiaora@fincap.org.nz

FinCap can help you with budgeting information online or on the phone. They may also suggest a local budgeting service to help you with debt and other budgeting issues.

Consumer NZ


Phone: 0800 266 786

Email: info@consumer.org.nz

The Consumer NZ website provides a wide range of information on consumer credit and debt issues, including debt collectors, repossession and bankruptcy

Commerce Commission


Phone: 0800 943 600
Email: contact@comcom.govt.nz
The Commerce Commission enforces the consumer credit legislation (the Credit Contracts and Consumer Finance Act) and the laws against misleading and deceptive conduct by traders (the Fair Trading Act). The Commission provides information on these areas on its website.

It’s All Good


It’s All Good is an animated series produced by The Commerce Commission about consumer rights.

Citizens Advice


Phone: 0800 FOR CAB (0800 367 222)
Citizens Advice Bureaux have volunteers trained in consumer law who can provide information and advice if you have a problem with credit and debt issues.

Dispute resolution schemes

There are four dispute resolution schemes for consumers dealing with lenders and other credit providers.

  • Financial Services Complaints Limited – www.fscl.org.nz
    0800 347 257
  • Email: info@fscl.org.nz
  • Insurance & Financial Services Ombudsman –
    Phone: 0800 888 202
  • Email: info@ifso.nz
  • Banking Ombudsman – www.bankomb.org.nz
    0800 805 950
  • Email: help@bankomb.org.nz
  • Financial Dispute Resolution – www.fdrs.org.nz Phone: 0508 337 337
  • Email: enquiries@fdrs.org.nz

Cases in the District Courts

The Ministry of Justice

The Ministry of Justice website has information about civil claims in the District Courts: see www.justice.govt.nz and search “Claims you can take to civil court”.

Credit reporting

Privacy Commission

0800 803 909

The Privacy Commission has information on your rights in relation to credit reporting and how to complain if you feel your rights have been breached.

Your credit record

Three credit reporting companies operate nationally in New Zealand. To check your record or correct any information, you’ll need to contact them all.

You’re entitled to a free copy of your credit record. You should make sure you choose the free option when you contact each company.

Centrix – www.centrix.co.nz 0800 236 874

Illion – www.illion.co.nz 0800 733 707

Equifax – www.equifax.co.nz 0800 698 332

Personal Properties Securities Register (PPSR)


Search the PPSR register to see if there is any security interest registered against a vehicle. This can be done for a small fee by registering to check online.

Bankruptcy and other options

Insolvency and Trustee Service


Phone: 0508 INSOLVENCY (0508 467 658)

The Insolvency and Trustee Service (ITS) deals with bankruptcies, no-asset procedures, summary instalment orders and some company liquidations. Information about those processes is available on its website. The ITS is part of the Ministry of Business, Innovation and Employment (MBIE).

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