IRD and Student Loan Debt, New Zealand
  • Home
  • Testimonials
  • Options
  • Planning
  • Blog
  • About
  • Contact

Bankruptcy contributions

28/6/2016

0 Comments

 
When someone becomes bankrupt, the Official Assignee will look at their budget and decide if they can afford to pay regular contributions towards their bankruptcy debts and costs.

In the past, overseas bankrupts’ budgets have usually been accepted at face value, unless there is something obvious, like $100 per week for entertainment. Recently, a harder line has been adopted. We are now finding that the OA routinely issues demands even if it is clear that the person has zero money to pay it. The onus is placed on the bankrupt to explain why they cannot afford the amount requested. In most cases, the OA is negotiable if you can go back with reasons why you cannot afford the contributions requested. In some cases the issue can be postponed and revisited at a future date, with nothing being paid in the meantime.

In other cases, we have had clients with exceptionally high, genuine, costs. When their costs were compared to the norm those costs were disallowed, however, an explanation and/or proof can make all the difference. Examples include clients with high food costs because they are gluten intolerant, high medical costs because of ongoing health issues, or high car payments where selling the car would have caused a shortfall that still needed to be paid plus a need for funds to buy a  new car. The point is, that if you really cannot afford the amount demanded, that submissions need to be made and negotiations entered into. In the car scenario, the OA believed that the bankrupt would have more money if the car was sold, but we were able to demonstrate that doing so would genuinely increase costs as there would have been a shortfall on sale. If submissions are reasonable, and in good faith, they will probably be accepted.

​Do not do nothing or respond in an arrogant manner. If you simply do not pay, the worst case scenario can include criminal charges, having your bankruptcy extended beyond three years, or being summoned to a meeting.
​
If unreasonable contributions have been requested of you we can help.
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    Archive

    November 2020
    September 2020
    August 2020
    July 2020
    May 2020
    April 2020
    January 2020
    December 2019
    November 2019
    October 2019
    June 2019
    May 2019
    March 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    September 2017
    July 2017
    May 2017
    April 2017
    March 2017
    February 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    June 2016
    April 2016
    January 2016
    November 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    September 2013
    August 2013
    July 2013
    June 2013

 ______________________________________________
© Tax Debt Limited.  Email:  help@taxdebt.org.nz