A significant advantage of becoming bankrupt yourself, without this being done to you by the IRD, is that your bankruptcy application will not be accepted until the Official Assignee is satisfied with your application details (or statement of affairs). Normally this takes no longer than about two weeks, but sometimes it can be as fast as a couple of days. Then, in exactly three years, almost all of these people will be automatically discharged from bankruptcy. They can get on with their new lives free from the debt.
If the IRD (or another creditor) applies for your bankruptcy this will go through without your statement of affairs. Because your bankruptcy runs for three years from the date that the statement of affairs has been provided and accepted, if you never provide a statement of affairs you could stay bankrupt forever. There are over a thousand New Zealand bankrupts potentially in this situation as they have not filed their statement of affairs. An example can be seen in this example from a forum post from Sally:
"To my question as I was made bankrupt by someone in New Zealand even though i was paying, I have not submitted statement of affairs, as i didn't want to confirm my passport number, is it lodged with immigration anyway."
Unless Sally submits her statement of affairs she will stay bankrupt indefinitely. Even if Sally does submit her statement of affairs it is certain that she will stay bankrupt longer than was necessary, which will hamper her ability to get on with her new life. The irony is that the Official Assignee would have little difficulty in obtaining a bankrupt's passport number, so withholding this information only harms Sally's future prospects.
Occasionally we come across a case where the bankrupt is adamant that they submitted their statement of affairs but the Official Assignee has no record of this. It is important that you keep proof of your bankruptcy dealings, especially if the IRD (or another creditor) has made you bankrupt.
In summary, if bankruptcy is a possibility, you are almost certain to be better off initiating the process. We have handled many bankruptcies and are here to help you with this process so that you can be free from unmanageable debt.