Apply for permission

If you become bankrupt, there are restrictions on what you can do. You must get permission from the Official Assignee before you can travel, be involved in running a business, or work for a family member.

Apply to travel overseas

If you are bankrupt, you must get consent from the Official Assignee to leave New Zealand. It doesn’t matter if you are going for a short time or leaving the country permanently. 

You should apply as early as possible.

Apply to be self-employed or be involved in running a business

If you are bankrupt, you need to apply to be self-employed or involved in the running of any business.

Your application needs to include details of an independent person with financial experience who has agreed to monitor your financial affairs and make sure that you meet all your tax and financial obligations. You must include a letter from them confirming this.

You are considered to be self-employed if:

  • you are responsible for paying income tax, GST, ACC or any other tax for yourself or any employees
  • you are paid on commission (including if you get wages but also commission that doesn’t have PAYE paid)
  • if you pay withholding tax, for example, if you are a building contractor or real estate agent.

You are considered to be involved in management if you:

  • are involved in decisions or policies about the finances or business of the company
  • do more than carry out decisions as an employee.

If you are unsure, contact your Insolvency Officer.

To apply for consent to enter into business, you must file an affidavit under Regulation 10 of the Insolvency (Personal Insolvency) Regulations 2007. An affidavit is a written statement confirmed by a lawyer or Justice of the Peace (JP). You may want to seek professional advice to complete it.

What needs to be in your affidavit

The affidavit must include:

  • whether the business is a new business
  • what capital you or anyone else will put into the business
  • what provisions you have made to meet all taxes and regulatory requirements
  • what plans or processes you will have in place to meet your health and safety obligations
  • who your financial supervisor is and what will be the role and powers of that person
  • any other information the Official Assignee may need.

If you have a financial supervisor (accountant), you must provide:

  • a business plan, in the same way that you would if you were applying to a bank for finance
  • a letter from your financial supervisor stating that they consent to manage your business affairs, file Inland Revenue returns, pay taxes and look after other administrative matters.

What else you should include

You should also include the following information:

Financial matters

  • how you became bankrupt
  • whether or not contributions to your current bankruptcy will be available
  • how an approval will benefit creditors in the bankruptcy
  • your business plan
  • details of bank accounts
  • your 12-month budget and cashflow projections - in some cases 2 or even 3-year projections may be required.

Practical matters

  • your present employment status
  • your legal right to work in New Zealand
  • a description of your duties and responsibilities in the business
  • the nature of your proposed business
  • what plant or equipment you require and how you will pay for this
  • whether staff are to be employed
  • where the business will operate from, that is, home or leased premises - for lease premises, provide full details of the proposed lease
  • any other information that will assist the Official Assignee.

Application form

Affidavit form:

Bankruptcy application for consent to enter into business (affidavit) [PDF, 249 KB]

What happens next

If consent is given, it will be given in writing. You must not enter into business until you receive the Official Assignee's consent in writing.

Apply to be employed by a relative

If you are bankrupt, you must apply to be employed by a relative (or a company or trust they control).

A relative includes:

  • your parent
  • your child
  • your brother, or sister
  • your spouse (husband, wife, and de facto or civil union partner).
  • your spouse’s parent, child, brother, or sister.

To apply for consent to be employed by, or work without reward for a relative or a business controlled by a relative, you must file an affidavit under Regulation 10 of the Insolvency (Personal Insolvency) Regulations 2007.

An affidavit is a written statement confirmed by a lawyer or Justice of the Peace. You may wish to seek professional advice to complete it.

What needs to be in your affidavit

The affidavit must include:

  • whether the business is a new business
  • what capital you or anyone else will put into the business
  • what experience the relative has and what their input will be
  • what provisions have been made to meet all taxes and regulatory requirements
  • who the financial supervisor is and what will be the role and powers of that person
  • any other information the Official Assignee may need.

You must attach:

  • a letter from your relative
  • a copy of your employment contract.

Letter from your relative

The letter from your relative should include:

  • the relative's experience and relevant expertise in operating this business or any other business
  • the relative's usual occupation
  • whether the relative is employed elsewhere, either part-time or full-time
  • whether you will be paid the market rate for your services, and if not, why not
  • who will oversee the financial aspects of the business, including book keeping, tax obligations and preparation of financial statements
  • a statement that the relative has managerial control over the business and its assets
  • a statement that the relative has and properly maintains, an effective and reasonable Health and Safety plan that comprehensively covers all activities undertaken.

The relative needs to show the Official Assignee that you are just working as an employee and not helping run or own the business. They need to state:

  • the level of control involved
  • your giving of advice to management and participation in decision making processes
  • if you will be executing or implementing decisions, beyond merely carrying out instructions of management.

What else you should include

The Official Assignee also advises to include the following information:

Financial matters

  • how you became bankrupt
  • whether you have been bankrupt before
  • the reason for your application
  • what money or assets of your own you are contributing to the business
  • whether your duties will include raising credit on behalf of the business
  • whether you will have authority on the business bank account
  • whether you will have a business credit card
  • details of the business bank accounts
  • your anticipated income
  • your pre bankruptcy employment including role, duties, responsibilities and income
  • whether or not contributions to your current bankruptcy will be available
  • how an approval will benefit creditors in the bankruptcy.

Practical matters

  • your present employment status
  • a description of your duties and responsibilities in the business
  • the name(s) of the business owner(s)
  • your relationship to the business owner(s)
  • the name and nature of the business
  • what plant or equipment you will be providing
  • whether other staff are employed and whether they will report to you
  • where the business will operate from, that is, home or leased premises – for leased premises, provide full details of the proposed lease
  • any other information that will assist the Official Assignee.

Application form

Bankruptcy application to be employed by a relative (affidavit) [PDF, 249 KB]

What happens next

If consent is given, it will be given in writing. You must not be employed by a relative or an entity controlled by a relative until you receive the Official Assignee’s consent in writing.