Housing and debt
Avoiding debts
Is there any way to get out of my debts?
First, it’s often a good idea to talk to the person or company you owe money to, and see if you can make an arrangement. They might agree to delay your repayments or accept a lower amount up front. If the person you owe is willing to do this, it’s much simpler than going through a long legal process in order to avoid paying debts.
Should I go bankrupt?
If you can’t pay your debts while you’re in prison, and you can’t make a new arrangement with the person or company you owe, bankruptcy is an “insolvency” option (“Insolvency” is when you can’t pay your debts). But you need to think carefully about whether it’s a good idea for you.
Before you decide to go bankrupt, you should check out the risks and the other options (like the “no assets procedure” or “summary instalment orders”). You should get advice from a budgeting service about your options. Go to www.moneytalks.co.nz, call them for free on 0800 345 123 or email them at help@moneytalks.co.nz
It’s important to make the right choice, because each insolvency option has different effects. Some debts (like child support debts) also aren’t always cancelled, so you need to make sure you are making the right choice.
If you go bankrupt (or go through another insolvency process), the people you owe may not get paid everything you owe them, and you will have more trouble getting credit (or a bank account, or an electricity account, etc.) When you leave prison.
For more information, see the chapter “Credit and debt” in the Community Law Manual
How do I go bankrupt or choose the no assets procedure?
You will need to fill out a form with a lot of information about your finances. You need to contact the Insolvency and Trustee Service (0508 INSOLVENCY) to get the forms. If you phone them, they can ask you all the questions and fill out the form for you over the phone.
