- Lump sum payment offer. The IRD may be able to remit some of the penalties. The amount they can remit will depend on the structure of your debt and your financial and other circumstances. Good negotiation skills can make a big difference to the outcome.
- Time payment arrangement for the overdue arrears. On top of that you will need to pay at least your compulsory amount of up to $5,000 per financial year. A common issue is that people assume that the arrangement covers their whole debt. This is not correct. It covers the arrears. Applicants for a time payment arrangement only need to supply minimal details about their financial and personal situation, compared to a hardship applicant who will have to supply details that many applicants find intrusive. Successful applicants for a time payment arrangement will be granted a small reduction in penalty interest rates on the arrears until they are repaid in full, assuming they keep to the agreement.
- Hardship application.
- Hybrid solution: If you have some ability to pay a lump sum, or ongoing payment amounts, the IRD can consider a combination of hardship application + payment arrangement + payment.
We'll assume that you are an overseas borrower and that bankruptcy is not a good option for you but that you have overdue arrears that need to be dealt with. The options are: