What happens to my debts?

What you need to know

On the date you become bankrupt all debts except those excluded by law will be ‘provable’ debts in bankruptcy.  These creditors can submit a claim for the debt in your bankruptcy.

Creditors holding security over assets may still repossess and sell assets on hire purchase or subject to security.

Student loans are provable in bankruptcy.

FAQs

What happens to my debts after I'm discharged from bankruptcy?

What debts am I still liable for?

Can I still get credit?

How do creditors claim their debts?

Can creditors repossess goods?

Do I have to keep paying my power and phone?

What about my rent?

What happens to my debts after I am discharged from bankruptcy?

Discharge from bankruptcy releases you from all provable debts which existed at the date of bankruptcy.  These debts no longer exist and you cannot be pursued by creditors for payment.

If a creditor seeks to recover money for a debt included in your bankruptcy contact the Insolvency and Trustee Service.

What debts am I still liable for?

Bankruptcy does not cover all debts.  You remain personally responsible for:

• Fines
• Reparation ordered by a Court
• Maintenance and child support
• Advances and overpayments from WINZ
• Debts incurred after date of bankruptcy.

Can I still get credit?

It is an offence to incur credit of $NZ1,000 or more without disclosing you are bankrupt.  Provide this information in writing to avoid any misunderstanding.  You may get credit if, after disclosing your bankruptcy, the creditor chooses to extend credit.

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How do creditors claim their debts?

Creditors must complete a claim form and supply documentary evidence of the debt.  The Insolvency and Trustee Service website will provide access to the list of creditors who have filed claims.  If you dispute any debt, contact your Insolvency Officer.

Can creditors repossess goods?

Creditors holding security over assets may still repossess and sell assets on hire purchase or subject to security.

The Official Assignee may require you to voluntarily surrender assets or enter into a new contract to continue with the purchase.

Where the value of the asset is greater than the amount owing, the Official Assignee has discretion to sell the item, repay the debt, and apply any surplus towards your creditors.

Do I have to keep paying my power and phone?

Any electricity or telephone accounts overdue at date of bankruptcy are provable debts.  Electricity or telephone companies are not prevented from discontinuing services so you may chose to pay the debt.  All debts incurred after date of bankruptcy are your responsibility.

What about my rent?

Any overdue rent at date of bankruptcy is a provable debt.  Landlords are not prevented from evicting you from a property so you may chose to pay the debt.  All debts incurred after date of bankruptcy are your responsibility.