When does bankruptcy end?

What you need to know

Bankruptcy ends by discharge or annulment.

A bankrupt is automatically discharged from bankruptcy three (3) years after filing a statement of affairs.  A bankrupt will not be automatically discharged if:

• No Statement of affairs has been filed or
  
• The Official Assignee or a creditor has objected and the objection has not been withdrawn or
• You have been directed to be publicly examined and have not done so or
• You are undischarged from an earlier bankruptcy.
  

FAQs

What does discharge from bankruptcy mean?

When am I discharged?

What happens to my debts?

What happens to my assets?

Is my employment restricted?

Do I still have to deal with the Official Assignee?

Will my credit rating be affected?

Can I apply for early discharge?

Who can object?

How can I prove I have been discharged?

What is an annulment?

When can I apply?

How do I apply?

What is a composition?

Will the Official Assignee advertise my annulment?

What does discharge from bankruptcy mean?

Discharge from bankruptcy frees you from the conditions imposed by bankruptcy and, except for certain exemptions, releases you from all of the debts you owed at the date the bankruptcy order was made.

The Court has the power to reverse a discharge under certain circumstances.

When am I discharged?

A bankrupt is automatically discharged from bankruptcy three (3) years after filing a statement of affairs.  A bankrupt will not be automatically discharged if:

• No Statement of affairs has been filed or
• The Official Assignee or a creditor has objected and the objection has not been withdrawn or
• You have been directed to be publicly examined and have not done so or
• You are undischarged from an earlier bankruptcy.

What happens to my debts?

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.

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.

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What happens to my assets?

Any assets claimed or held by the Official Assignee during your bankruptcy remain under the control of the Official Assignee after discharge.

Is my employment restricted?

The Court may prohibit you from doing any or all of the following things without the Court's permission after discharge either for a specified time, or permanently:

• Being in business (self employed), or in control of a business
• Being a company director or
• Being employed by a relative or entity controlled by a relative.

Where the court has not imposed conditions you are not limited in what you can do.

Do I still have to deal with the Official Assignee?

Following discharge you must continue to assist the Official Assignee with matters relating to your bankruptcy.

Will my credit rating be affected?

Your credit history will be affected for up to seven (7) years which is how long credit agencies keep records of your bankruptcy.

Credit agencies operate internationally and can be accessed in New Zealand and overseas.

Can I apply for early discharge?

You can, at any time during the three (3) years, apply for an early discharge. To apply you must:

• File an application in the High Court
• Give reasons supporting your application in an affidavit
• Advise the Official Assignee of the hearing date, time and location at least 15 days prior to the hearing (to enable them to provide a report and attend the hearing)
• Forward a copy of your application to the Official Assignee and each creditor who has filed a proof of debt
• Advertise your application in the local newspaper at least 21 days prior to the hearing date.

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Who can object?

The Official Assignee or any of your creditors can object to your early discharge.

How can I prove I have been discharged?

If you would like a copy of a certificate verifying your discharge, contact any office of the Insolvency and Trustee Service or call us on 0508 467 658.

The status of your bankruptcy will be listed on the Insolvency and Trustee Service website.

What is an annulment?

An annulment is a cancellation of a bankruptcy.  An annulment can be granted by the Official Assignee or the Court where:

• You should not have been adjudicated bankrupt or
• You have fully paid or satisfied all your debts and the Assignee's fees and costs
  
• There has been a substantial change in your financial circumstances since the date of adjudication or
• The Court has approved a composition.

When can I apply?

An annulment application can be applied for at any time during bankruptcy.

How do I apply?

An application for annulment is made either to the Official Assignee or the High Court.

What is a composition?

A composition is an agreement reached with your creditors to repay all or part of your debts.  Your creditors must agree to the composition at a meeting of creditors and then this must be formally approved by the High Court.  Upon confirmation by the Court the bankruptcy is annulled.

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Will the Official Assignee advertise my annulment?

The Official Assignee will advertise your annulment in the New Zealand Gazette as soon as practicable.  Your annulment will also be published on the Public Register.