Can anyone shed any light on what happens if you file for New Zealand bankruptcy but are already set up and living in Australia? How does the travel ban work when you have already left? And how do you mange the OA when you ain't living in New Zealand anymore? Also, being a director of an Australian company or self employed - surely they cannot do anything outside of New Zealand? The main issue is going home to see parents etc. Do you have to get permission to go home or only if you want to leave again I suppose. How does this work if I'm just shooting home to New Zealand for the weekend?
I'm not sure you will be allowed to go bankrupt if you are living outside NZ and self-employed with another business, as you need permission to do both of these if you go bankrupt. Also, your financial affairs in Australia will be assessed as part of your application to go bankrupt. Remember that any assets you have apart from household goods necessary to living may be taken as part of the bankruptcy process. Insolvency NZ is quite clear that the conditions of your bankruptcy remain the same whether you are in NZ or overseas. See more information here: http://www.insolvency....
hi i have been liveing in australia for four years i was bankrupted on 23 feb 2012 so you can go bankrupt while in australia you cant be selfemployed unless you have permission in australia(you can have abn number) you cant have debt over thousand dollars the same rules apply has if you were in new zealand also they can take your australian assets and any money in your bank account i think you would make it out of australia but i doubt they would let you outta new zealand note the aussie banks dont care what promblems you have in nz as long as you have kept them happy here.they dont seem to check your nz credit rateing .so if you are bankrupt in new zealand you are bankrupt in australia.
Did u file for bankruptcy or did your creditors file against you?
I would also like to get some information please? We have been living in Australia now for a year. After the economy crashed in NZ my husband and lost our business and decided before we loose everything we along with our kids moved to Australia to pursue a better life. We at first paid our creditors in NZ but after a while it became hard to try and do it all and it doesn’t matter how much we invested back in NZ it was just never enough... so we stopped. It was okay until a couple of days ago when the people started to haunt us again.... so my mind is working in overdrive and would really appreciate other peoples opinion and experiences please. I know the downfall with bankruptcy but I think if we don’t file for it our creditors will.
My family and I have moved to Australia due to loosing our house and employment in the Christchurch earthquakes, we are currently filing for bankruptcy and need to go to CHCH before it all gets finalised.
Will we get stopped at customs in or out?
I was told by liquidators here in NZ to never apply personally for bankruptsy.
my question is we have a large amount of debt through debt collectors (due to business going into liquidation, but of course that has now been pinnind onto us personally)
I am scared if we find work in Australia & we head over are we going to be able to find a rental property?? & get power phone etc on over there, what with our bad credit here in nz!
our credit was wonderful until the business had to go in liquidation due to the recession a couple of years back!
Ok. My understanding is as follows however I cannot be sure how thorough your Australian financial institutions are or will be etc. If u have recently relocated here to Aussie to escape your financial burdens in NZ, that won't work. When applying for credit they have linked systems such as Baycorp or Ticker. If you have been blacklisted for bad credit or unpaid rent etc it will show here. Then theres the travel between the two countries. If u have abandoned your debts and left the country (like done a runner) you will be caught either in arrival or departure of your originating country with whom the debt is held.
I hope this helps with your enquiry.
Ok. My understanding is as follows however I cannot be sure how thorough your Australian financial institutions are or will be etc. If u have recently relocated here to Aussie to escape your financial burdens in NZ, that won't work. When applying for credit they have linked systems such as Baycorp or Ticker. If you have been blacklisted for bad credit or unpaid rent etc it will show here. Then theres the travel between the two countries. If u have abandoned your debts and left the country (like done a runner) you will be caught either in arrival or departure of your originating country with whom the debt is held.
I hope this helps with your enquiry.
I am in a reversed situation from the above comments, I have a tax debt in Australia which I am paying but struggling (I have worked and paid my taxes in Australia for 23 years no problem. But had a company that did not work out. In fact I was unable to pay the last instalment. They have told me already if I fail to pay I will be arrested and jailed. I am living in NZ now and what to know how far can The Australian (the largest taxing country in the world) go to retrieve there so called debt from me. Can they take my house in NZ?
Hi everyone, interesting reading. We relocated to Aussie in February this year and had sorted our bills in New Zealand. Two days ago we found that our tenants had stopped paying their rent (this covered our mortgage and bank loan). The tenants stopped paying only a month after we left. Those tenants are also family members who it seems have taken us for a ride. We are a single income family (we have two kids, one being 13 months old, one 11 years old. We also have a new baby due in two weeks). As we have previously worked two incomes we have found it harder to get by in Aussie but were doing it anyway because we love the country.
Anyway, with the debt in NZ we have just found out that it has not been paid, were concerned. I am frightened. I am 40 years old and have always had great credit. So were going to sell our house and try and pay as much as we can on the bank loan.
A friend suggested we go for bankruptcy. I have too much pride to allow that but now have two new babies who need me to be able to provide for them. Guys, anyone, what do? Bills we have is only about 30k and i am sure we will be back on our feet again soon but am afraid of what to do.
Good Afteroon All,
I recently moved over to Aussie with my partner too looking for the good life we decided to rent our home out in nz we were suppose to pay part of the mortage our selves but time are hard I am serously thinking on taking Bankruptcy I have bills up to my eye balls,cant find work here in Melbourne. I already sent a email to the bank about our situation and didnt get much of a reply.I wanted information on Bankruptcy so we can start all over again Im to scared to go home to had enough
I an a kiwi now a resident in Australia. I own a houes in the red zone in NZ. I can't sell it.I don't want to live there, my tenant has stopped paying rent to me. I have arrears that amount to to much for me to pay. I whis to claim bankruptcy. What would be my first step?
How long does this process take?
I would suggest you do a search for bankruptcy in New Zealand. I just did one and it turns up a lot of useful information. Do consider if it will affect you over here.
Give the NZ Insolvency and Trustee service a buzz and the people there are pretty good at helping you out through the process and providing necessary information to you. Usually takes about 10-25 working days depending on the completeness of your statement of affairs.
Thank you. That is very helpful
I moved out 11 years ago to aus. I had enough of getting stuck in the same circle again and again.
Best move I have done. Although, upon recently renewing my passport, they got fresh details for me, and I'm in the process of declaring bankruptcy in New Zealand cos with a few things that have gone on here, 3 kids, divorce, yes, in 11 years, I move fast. But with child supp and the few loans I have in aus, my student loan in nz has become unpayable. They are so unreasonable to deal with. I've tried offering a payment option, but good ole john keys has removed any reasoning, so the only way I can fix it is to go bankrupt over there . It's ridiculous. The country is turning into nazi Germany, I guess you can't spell that without n z.
I'm going to seek citizenship here too, cos after how you are treated in nz, I don't want to be a part of the country anymore.
Understand what you are saying. Question. How have you gone about declaring bankruptcy in NZ, living here. Did you get a lawyer. Or do it thru the govt. bankruptcy website. I need a lawyer in NZ to do the necessary for me. Just wondering. I am very naïve about these things. Its to a bank that I owe money in NZ...robbing Peter to pay Paul....yes, sad about NZ...pretty country, nice people.
I now don't feel alone. We have recently moved to Australia to earn more and try to save our house in NZ but since interest rates went up again it's become impossible to pay our nz debt. Even though we fought tooth and nail to keep the house, we may have no other option than to go bankrupt in nz. I feel the same way as kolakiwi. I'm proud to be kiwi born but who would want to live there this day and age. It doesn't feel like nz anymore. It's also a pride thing for us but we can't live on nothing so what other option is there!
Hi I am also looking at Bankruptcy. I have lived out of New Zealand for over 16 years now, most of the time in Australia. I had a student loan of 17,000 and have had no contact from IRD for over 14 years. I naively assumed the loan had been made void as it had been such a long time with no contact from them. A few weeks ago I received a huge bill in the mail. I am unable to pay it, I am a mum of two small children and no income. My partner refuses to pay this amount of money to the NZ government. Has any one else filed for bankruptcy in this situation and had a win? Thanks for any feedback.
I have recently been bankrupted in NZ but have lived and worked in Austalia for the last 3 years. I have booked (before Bankruptcy) to go back to NZ for Christmas. Will I be stopped from returning to Australia?
hi there. my delimma. we have 2 homes with mortgages on in Tokoroa. we have been living here in aussie for over 3 years. can we file bankruptcy over here for nz? does it affect your credit over here?
So anyone on here actually willing to explain the steps in which they took to declare bankruptcy in N Z?
I had a student loan that I ignored for 15 years. Should have declared baankrupcy when I arrived in Australia 15 years ago...
I've Just gone bankrupt,to keep a long story short and not going into too much detail, I had a student loan booked up in New Zealand in 1999 and 2001, moved to Australia 2004 and still living here. I got sick of listening to people trying to say what they assume happens if you go bankrupt, what assets will be taken off you, the fear of going home for a holiday and not being let out or being arrested at the airport blah blah blah, we've heard it all before! Id had enough and got in contact with an accountant in Auckland, paid her $150 to give me information about what will happen if I go bankrupt in NZ and remain living in Australia, the info she gave me was according to my situation, your situation will be different to mine, so you need to go straight to the source who will weigh up for you if its worth in the long run going for. I then paid $600 for her to file my application to go bankrupt and for me it was worth every cent, it took the stress out of the process applying for bankruptcy, took around 3 months?I didnt have to deal with IRD and it's now taken a load of stress I've been carrying every time I got a letter from IRD saying I owe money.So I am one person who lives in Australia and gone bankrupt in NZ, but for your sanity it is worth paying someone to give it to you straight what will happen to you, based on your situation, hope this helps. This is in no way or my intentions to look like I'm boasting or trying to be a know it all, just if this helps someone then this is a good thing
Hi I've lived in Aus for the majority of my life, I stupidly moved back to NZ for a small portion to do an extremely overpriced arts course. When I left I just gave up thinking about it. I never received any mail thanks to my family not passing it on. 10 years later I have a debt of 48000 I have to pay as Baycorp has contacted me. There is no way I can pay it as we are struggling already with the cost of living and raising 3 young children. I need to apply for bankruptcy. I have no assets in my name. Would it be best to do it myself or go through a lawyer? I feel sick and terrible that I can't pay but I was very young and dumb. I feel absolutely riddled with guilt and sick about this. I have never defaulted on a loan before. Please any advice would be appreciated.
I'm not sure if you live in NZ or Australia, that's beside the point, go through student loan bankruptcy Kristina, tell her your situation, 150 to get all the advice off her in regards to what happens when you go bankrupt, 600 for her to file your application, worth the money to get her to do it, you don't deal with the debt collectors she does it all for you, it's worth your sanity and it's not fair on your kids having to go without money, that can go towards them over, like you said, paying the consequences over a silly decision you made when you were young. 600 sounds
Iike alot but it's not compared to 48 000. Sometimes as nerve racking as it is trusting someone to apply bankruptcy for you, just bite the bullet, it's got to be better then being in your situation right now
Could you please provide some details on who you went through to go through the insolvancy process?
Hi we are in the same situation. We are living in australia and my partner has a student loan debt in nz and is considering bankruptcy. Just wondering how it has affected your credit rating here in aus?
Her name is Kritstina an accountant in Auckland, if you google Kristina accountant nz student loan bankruptcy it will come up her details. She's very approachable, and quick to get started on the applications
ok- so several months ago I agonised about my ever increasing student loan debt. After travelling to NZ at the end of 2013 I started getting emails and calls from the IRD. Fairly stressful considering my debt is probably north of 90k from an initial 3 years study approx 23k loan incl living costs.
I finally realised that I had no other choice but to declare bankruptcy. The stress was just too much. Logging onto the insolvency website it took about two or three hours to collate all the details you need. If you are missing something the assigned agent will be in email contact with you. Within ten days you will either be accepted into bankruptcy or not.
I have to say the immense relief that bankruptcy has had over me and my family.
Just letting people know that the process of apply for this is not as daunting as you may think.
There are some interesting FOI articles regarding recovery of assets from overseas bankrupts on the net (there has not been a single recovery of an asset for any is bankrupt)
Lived in oz since 03. Moved here cause theres more opportunities and pays better wages. I was struggling to find full time work, the employment agencies were very unhelpful, they lacked in alot of areas especially communication and doing there job. Social securities in around year 2000 paid me half of what the newstart wages get here in Oz a fortnight, thats a joke. I had a court traffic fine which the traffic call centre continuosly harrassed me to pay and were so rude & they were awaware i was unemployed looking for work, my social securities just covered rent, i was struggling, they did not care, they said if i dont pay them $100 a week they will add $100 daily to my fine till i paid it. I was sick of struggling and being harrassed so I left NZ 03 never returned since. I travelled back to NZ for a holiday and came back to OZ, good timing, the authorities had a warrant for my arrest and was too late to arrest me at the airport. Since i havent been back. Does anyone know what i shld do? Be nice to see my family. Ive heard nothing since 2004.05 so can this fine be void? I know they will arrest me and never leave NZ. If i file bankrupt frm here am i allowed to enter nz and leave?
I am in similar situation with needing to go bankrupt from a large student loan debt. Live in Aussie and have done for 9 years. I too have paid a tax advisor $150 to her info and she rec I go bankrupt but my question is. Nz said I cannot have any $ in my account over $1000 or they'll take it if I'm bankrupt. I will have over this amount in my account when my fortnightly wages come in. I only work part time but I have money I transfer into step savings accounts saving up for when my bills come in (mobile, rego, internet etc)... Will they try take this money? Esp the rego money that will sit in there for a few months till there's enough to pay my rego!!
I also have a few dollars I put in another ACC just $5 a fn for my daughter. Will they try take her money too? Help I'm scared lol
i'm considering the same at the moment due to student loan debt, the post from Toad the wet sprocket above seems to suggest recovery of assets overseas by the official assignee is rare if not non-existent. Just wondering if you had assets toad and/or income that you actually let the official assignee know about and if so whether they just didn't bother going after it. Also which country are you in?
You can actually ring up insolvency nz and ask them any questions you want to about how it works. I found them really helpful but i agree it's a bit intimidating not knowing how much they will take. From what i can tell all the money you need for living expenses is safe. You can download a form from them that gives you a better picture of what this includes.
That's the whole point, if you are overseas they need a court order to garnish your income. I'm looking for examples of people in Australia or overseas who have actually been through it and if they had any income garnished.
We have already determined from Toads post above that assets most likely won't be taken so I'm more interested in the income side of things.
I Aus if you go bankrupt there are specific amounts you can earn before you are required to make income contributions depending on how many dependents you have but for going bankrupt in NZ there are not such specific amounts.
This is all a moot point anyway if the process of garnering income is to difficult and/or expensive for NZ bankrupts overseas.
Is anyone willing to share their experience of this?
I have debt in NZ and moved to Australia 3yrs ago. Debt collectors are communicating through my email. They are threatening to file the debt in court and issue warrant for my arrest if I don't pay in full. The debt amounts to 10,000. Can they do this and what happens to me if i go back for holiday? Will i be arrested? I can't meet payments they are demanding each week as am struggling here in Australia as well. My family are shouting me a trip home in 6months. Am I safe to go?
Hi, As I read from the forums , it seems like for some Bankruptcy application process seems smoother. I have one question- does anybody of you know anyone or hold joint bank accounts overseas that you did not declare or feel not important to declare when applying to NZ bankruptcy? Is it possible for the OA to find out from NZ if or not one holds a joint account in say USA or Singapore? How long did it take for you to get Bankrupt? If we declare partners income ( for the loan we made before marriage), is there a way OA could possibly come after that or just REJECT the application because spouse income is higher than the debt itself? I am applying for Insolvency from USA where I am unemployed and fully dependent on my husband. I am unable to start making any repayments for the next 3 years and as I see it the Interest is very high along with compound interest which makes no sense for me to just wait. Does anyone seem to be in the same boat as me? What are your thoughts? Do you suggest going through someone or applying on our own will do no harm?
My situation is similar although Im based in the UK for the last 10 years. Have no intention of returning to NZ in the next few years and have recently been contacted by the IRD regarding outstanding student loan debt. I am considering filing for bankruptcy as I will be unable to repay the debt especially with the high rate of interest applied for living overseas.
I am married and jointly own a home in the UK - does anyone know if this will be included as an asset and if they could force me sell since it is not in NZ?
Hi I am in the same situation. Buried my head in the sand and should have tackled it earlier but didnt realise the penalties and the interest associated. Loan is now on the large side and its growth is snowballing. I have tried to negotiate with the IRD but they didnt budge much and the cost of borrowing the money is high. Without a discount wont have a chance of paying it off.
Am seriously thinking about redundancy but worried they will attack my joint assets here or produce a budget that isnt relevant to the cost of living for Australia.
Anyone living here with been through the process and can run through how thorough they look at your assets and living expenses ? Also does a lease vehicle count as an asset ?
Contact Kristina Anderson in NZ who specialize in Bankruptcy filings for people around the world who have loans with IRD. Her e-mail is email@example.com
Look at their website here :http://www.studentloan.org.nz/blog
I don't think Bankruptcy in NZ would affect you overseas. I already paid them about 500 NZD to process the application for me. Usually, you can do it all by yourself also going to the Insolvency website. Owning Joint accounts can be a problem in case the OA decides to pursue it keenly. But say your Joint Account has 100 AUD and your loans are 150K, why would they then come around that far? Its a lot of expense- So it usually depends on whether its all worth the chase. You do need to declare your joint income if you want to go for any insolvency. Some people open a family trust and put the money in there but all that needs to be well thought about and the timing is important also. Hope it helps. But from what I have heard and read everywhere, the application process takes about 10 days to get completed and Anderson accounts have had a 100% success rate in Bankruptcy filings for their clients.
Lets keep this post updated with people who actually go through the process and how the OA treats overseas assets and income, yours Angela would be a good starting point, please keep us updated.
Hi all, I'm a from NZ, living in Australia and I'm very close to completing my bankruptcy with Kristina who has been very helpful with the process.
For those who have completed the bankruptcy through Kristina - can you tell me how your joint accounts (if any) were affected? Kristina has advised that anything over $1000 NZ will be at risk.
I understand that I am unable to save during the bankruptcy, but as a contractor, I'll need more than $1000.00 in my account. Sydney is expensive, and there have been months where I have been without work in the past. A cap of $1000.00 would make life very difficult, not only for periods of unemployment, but for unexpected bills. For example, last year I had an operation on my leg for over $2000.00.
Thanks for your advice.
@Toad the wet sprocket
Could you please let me know what the outcome has been during insolvency?
I understand that I am unable to save during the bankruptcy, but as a contractor, I'll need more than $1000.00 in my account. Sydney is expensive, and there have been months where I have been without work in the past. A cap of $1000.00 would make life very difficult, not only for periods of unemployment, but for unexpected bills. For example, last year I had an operation on my leg for over $2000.00.
Have a student loan of $48,000 with IRD. Did just try for a settlement with the IRD, working through guidence from a lawyer friend. Offered up 50 cents to the dollar owed. This just got denied. Like most people, I jumped at the loan in the early 90's, and when I was in NZ I made weekly payments over several years - but as soon as I moved to Aus (after being made redundant and not securing employment in NZ, was offered a position in the GC), the interest has leaped up and wiped out all the payments I did make. What a waste. I have had several health issues and watched my loan skyrocket up. I am just starting the process of bankruptcy with Kristina (mentioned above) and will update here as I go. Have just paid an initial $150 (NZ $) and this is kick off for me.
Yes, Kristina seems to have handled many such bankruptcy cases and after reading what you have gone through with IRD, I think that is the only way to get the monkey off our backs. I am in the same boat as you but I am wondering how the OA would deal with your foreign assets as you have a job and an account overseas. If it has any cash that can be liquified, you might have to be careful. Assets cannot be liquified so easily like a house, Car and Land. What did Kristina tell you about your situation. Please post here.
I am in a similar situation to most of you. For those of you who have gone the bankruptcy route with property in Aus, I'm keen to know whether the OA pursued your property? This will be my deciding factor I think in whether to go the bankruptcy route.
Have got initial advice from Kristina but she hasn't really told me what to do, just given me 4 different options.
Also, do they actually let you keep sufficient to live comfortably on? By comfortably, I mean paying daycare fees for 3 x kids, and medical expenses for 3 kids all with ongoing medical issues etc. I'm scared I won't be able to support my kids ongoing needs.
Also, can someone explaint he $1000 cash thing. What if you need more than that in your account to pay upcoming bills etc? And what happens if the OA deems based on your household budget that you have money to spare? And do they include your spouses income in that budget? That seems a bit unfair when it was my debt.
Grandpas Gruts do you own property in Aus?
Hi To those who are applying through the help of Kristina, please share your experience and what the outcome is looking to be? What did she say ? I know she gives us options but the final and hard route sounds like Bankruptcy. Also to those who have applied , how long does it usually take for a result? Please share your detailed experiences with Bankruptcy procedures through her company. Seems like she deals with a lot each day.
Heya. I don't own any property, not even a car or bike. With the excess money in accounts (over $1000), as long as you have a solid reason for it, then it is fine. Example is my monthly payments for rent is over $1000. It can't be you saving cash for a holiday or anything unaccounted for. I have rent, food, bills, train fees, gym, physio, dr bills (I have health issues) and general living expenses. I don't have kids or animals, but they have to take that into consideration (food, daycare, school fees). I am now filing in late September as I am having an operation soon. They can't touch my oz superannuation. Looks like they may not be able to touch Kiwisaver either (recent case). Can fly back to NZ, as long as I didn't pay for the flights (unless family emergency) but need to ask permission to leave again. I have dealt with people in the legal profession and all agree that this is the best way to go for my situation.
Also a total of three years of bankruptcy, a couple of months to organize with Kristina.
Its always case by case. If you dont have any assets, there is nothing that OA can take. There are always many variables that need to be considered and there always be a risk.
There have been case, where OA has frozen AU bank accounts throughout the 3 year period. So regardless of initial outcome, you never safe until you have been discharged.
Situation with student loans is becoming critical. Its better to do something now, as surely IRD is seeing more and more cases people going bankcrupt and will do something about it.
How many here recieved phishing letters from baycorp and calls from blocked number?
Hi That is true but as long as the person does not have more than he owes to IRD, he should be fine. Its not that the OA will make him homeless those three years. They take into account how much is needed to live and in an expensive place , they do take the cost of living and travel into calculations. Yes, many debtors living abroad are taking this route because they can never imagine to pay the whole interest that gets compounded every year along with penalties and if you do the math, its usually takes on an average of 10 years for FT workers to repay a loan of 50K which is what most debtors eventually end up paying back to the govt for the 3-4 year college degree they earned. And imagine you don't have a job!!! It makes things worse. And interest keeps on accumulating for all those years. Mind you , it wont stop because one does not have a FT job. Wondering if anyone in this forum hold a Joint Account and gone bankrupt?
@Angela, joint accounts OA can only take the part that belongs to bankcrupt. OA cannot take your partners income.
Realistically OA can make you homeless and it's in their power to take any asset of significant value to them that bankcrupt holds. If you own a property jointly, OA can take your share.
Also, owning joined accounts mean, that OA will unlikely to have the power to freeze them, which they could easily do on accounts owned by bankcrupt alone. If you can show, that you do not have any money in our joint accounts its fine.
This is a great article about New Zealand student loan debt problem. Only from around 2012, bankruptcy gets rid of the loan.
I'm in the same boat. Contacted recently by the IRD regarding Student loan debt now at a whooping $70,000 and they asked with a straight face if i could pay it all immediately, er no, if i had $70k i would buy a house. There is no way i could even afford the repayments they want which is more than my rent each week and i live in a capital city, so i'm looking at Bankruptcy as well. I have a bit of cash and too many vehicles which may be at risk, but the cash and vehicles are going to disappear well before they can get their mits on any of it. Also 1 day after my IRD call i had Baycorp on my ass, bastards. For everyone else going through this, good-luck.
I'm the same boat as a lot of other people here. From my research, I've gathered that the OA in NZ have not pursued overseas assets since 2009. Technically, they CAN, but it would appear that they haven't. My confusion lies around the $1000 maximum. How does the NZ Govt know what you would have in an Australian bank account?! Other things I have read say that applying for bankruptcy in NZ has little to no effect on you overseas... which suggests that outside of NZ, you're basically free to continue living as you normally would.
If anyone has actually gone through it, it would be great to hear some feedback around the bank account situation.
When you submit your application for bankcruptcy you have to give OA statements from all of your accounts plus joint accounts. They will work out what you have and what you spending. They will look if you had funds transfered to other accounts that have not been disclosed.
Once you become bankcupt, OA will not have direct access to your accounts. However at any point of time, they can ask for a statement.
They can also freeze your accounts, if they believe you breaking your obligations as bankcrupt. To do so, they must seek a court order in Australia which than be sent to your bank.
End of the day, OA can only do anything to you through courts, however if you are in Australia, its easy to do, due to similarity of laws.
Any more updates from people going through this?
I live in Australia and was recently accepted into bankruptcy in New Zealand. My only debt in NZ was a $45,000 student loan. I have very little in the way of assets and basically get by month to month as a single mother of two children.
I get paid monthly so about $4000 went into my account today. To my horror I have just found out that my account has been stopped (today with no warning) by the OA and a note has been left for me to call the NZ Insolvency and Trustee Service for any enquiries.
I am guessing the reason for stopping the account is that the balance is currently over $1000. I have been completely honest in all dealings with the OA and sent everything they have requested.
Has this happened to anyone else? I am really scared and upset and I don't think I will be able to sleep tonight. I can't call them until the morning during office hours.
JanZ. Sorry to hear that. Wow -did not know so much control they can have on your accounts. Well, may be that is the whole point too. They do closely monitor your finances for 3 years from the time of declaring Insolvency and if you are able to show them how you need those 4K for your kids and yourself, may be they will agree. Talk to the OA. I am sure there will be some solution and you can strike a mid ground. Did you apply via Kristina? I am in the process of submitting my application and have a similar loan amount like you. IRD is very strict about negotiation and in fact there is none. You just have to make the payments or go Bankruptcy route which seems like a better option for many.
Has anyone figured out how the $1000 in the bank account limit works? Also has anyone been approved to be self employed?
After a very sleepless night and many calls between the bank and the NZ Insolvency and Trustee Service the stop on my bank account has been removed.
The upshot is that, because I have a personal loan with my Australian bank, the NZ ITS sent them a letter advising of my NZ bankruptcy. Apparently they are obliged to do this regardless of where any creditor is in the world. Note: When you apply for bankruptcy you must list all your debts both in NZ and overseas in your statement of affairs even though your overseas debts are not included in your NZ bankruptcy.
My bank stopped my account because it is standard procedure in an Australian bankruptcy. The letter they received is also a standard letter sent to creditors and it was worded in such a way as to sound like my Australian personal loan was involved in the bankruptcy. It isn't.
NZ ITS did not request that my account be stopped as the bank had initially advised the other night. Further, NZ ITS have advised me that they would never request an account be stopped.
The lesson for those living in Australia and considering bankruptcy in NZ is to be aware that the NZ ITS will write to all creditors (even if overseas) advising of the bankruptcy. It is probably a good idea to have your salary paid into an account at a completely separate bank before you apply for bankruptcy. I did get the stop removed but it was after much discussion back and forth.
I hope this helps others in a similar situation. Best of luck. :)
Okay, so for those of you who concerned about their credit file.
I'm New Zealand bankcrupt and my credit score in Australia in Excellent category . Like i have mentioned above, its a law that only Australian credit history must be used. However creditor still has a right to check your rating in another country.
This is a good chance this may happen if you recently moved from NZ and have no or little history here in Australia.
Regarding accounts being stopped by OA. I can only repeat, that the only way for OA to do that is to first take case to NZ court and than transfer it here to Australia. This is very costly for OA and will only be done if there is something significant at stake that is already been proven. Otherwise it could be just waste of money and court case may not be won at all.
And no, OA cannot see your accounts here in Australia.
I agree with Itsnotfun. OA can do everything in their power to stop your funds if you are in an outside country for the 3 years of Insolvency but they don't do it unless there is a good bait in doing so. If you are running from paycheck to paycheck, its not of much use to the OA anyway. He looks at your budget closely and decides if you are true on paper and in case he has doubts he communicates via e-mail. Mostly ,its going to be okay unless you are lying about your million dollars sitting somewhere offshore and he gets a clue that he can recover the debt somehow. Infact then he can recover his costs of going through that process too. Don't worry if you have a big loan and are salaried below average with dependents and all. Also I believe people who are dependents on their spouse and have applied for bankruptcy can also be safe as long as they don't own joint accounts with their 'rich' husband or whatever. That is also the reason why many people do not have combined joint accounts . For legal purposes its not safe and wise. For single parents who are going Bankrupt, I heard OAs are very considerate and not very tough even on their paperwork. They also come out of Insolvency quickly to be back on their feet and sometimes that has been allowed. Good Luck to all.
Sorry to all for my absence from this forum.
Since I declared bankruptcy I have had little need to dwell on my situation - It's a great relief for my family - Not entirely worry free however.
I didn't have any asset except for my superannuation which is untouchable under Australian law.
When I decided that I needed to go bankrupt I made sure what ever I submitted was truthful. I personally think that when you submit from overseas they "probably" don't bother doing any checking or can't. But it is a legal process so it pays to treat it as such.
If I could give myself some advice. I should have declared bankruptcy as soon as I moved to Australia in 1998. I'd be in and out of bankruptcy twice over by now. Some real good advice would be not getting a student loan to start with! My kids won't ever have to deal with this. Please make sure you educate yours (sorry to sound preachy but if my parents or my school had spoken to me - a dumb 17 year old, about the real repercussions of a student loan then I/we wouldn't be on this forum)
From submission to acceptance was a couple of weeks max. Then they send you an email a month later with some strict rules - Notifying them if your situation changes and that you need permission to travel and that you'll be automatically discharged in three years time(it sounded like the email letter they would send to NZ based defaulters).
I'd love to go into real detail but the more detail I go in the more identifiable I'll be.
Bankruptcy is not to be taken lightly but it's not the end of the world either.
So if I declare bankruptcy in NZ while living in Australia, it will be a problem to travel or get pay into my bank account?
Could please anyone let me know if I declare myself bankrupt in NZ but am living in Australia, will it affect me traveling outside of Australia - of course, not going to NZ. Also, will it make it harder to get a job and keep a bank account in Australia? Can I keep more then 1k cash in the bank there? Cheers everyone
Been reading with interest. I came to Australia in 1999, am now a joint citizen of both NZ and Australia. I, along with many others, took out a student loan in 96-98 for an arts degree that I didn't even complete (silly and young 17 year old). I was truly under the assumption that my loan had been paid. They had my parents address and not one statement was received. Until late last year. The debt has skyrocketed to over $70k.
I've tried numerous times without success to negotiate with the IRD. I work fulltime on an income less than $50k, have a mortgage, couple of credit cards, a personal loan. I also have three kids. I don't have a spare $5000 a year to hand over to them. And they are getting quite nasty.
I managed to get declared as having financial hardship at the beginning of the year by showing my finances. That wiped all the overdue interest from outstanding payments (read: 14 years worth), but only up to March 2015. The letters have just started again as of course I didn't make my required $2500 payment that was due at the end of September.
So I'm revisiting the idea of bankruptcy. I had thought about it at the start of the year but hesitated due to the assets I hold here (namely the house). That house is mortgaged jointly with my Australian husband and I fail to see why I should place that asset (and his financial wellbeing) at risk for a debt held in another country that is solely my responsibility. There is no equity in the house though so perhaps they wouldn't chase me for it... Nobody can give me a clear answer.
Added to that, I've married here in Australia and as I'm an Australian citizen am travelling on a foreign passport. My understanding is that they probably wouldn't even realise I was going in and out of NZ to visit family due to the passport issue and name change. Could be wrong there though.
So. Such a tough decision to make but otherwise this loan will just keep spiralling. The interest alone in the last six months was approaching $2000. In six months! Why make myself struggle even more financially to give the NZ government $2500 every six months when only $500 of it would come off the actual debt? At that rate I'll be paying it off until I die, not an attractive prospect.
If only I could go back to my 17 year old self and say no, don't sign that piece of paper.... :(
Hi, I totally agree with Sparrow and I am in a similar boat who has just now sent the application to Anderson Accounts to move ahead with my Insolvency Application. The turn around time will be 10 days or a little more. I will keep you all posted of how the procedure went and how easy or hard it is. But Bankruptcy is the route for many helpless loan defaulters. It also makes complete sense. Please share your experience with Bankruptcy and how it all went anyone who has done that successfully.
If a New Zealander and a non-citizen of Australia owes money/bankrupt in New Zealand and wishes to file for bankruptcy in Australia Please help with the following:
1. Does his Australian wife who has a joint house loan with him also file for bankruptcy?
2. How do the banks in both countries view this situation and who pays what?
Hi, I owe $45,000 to student loan. I have paid Kristina $150 2 days ago and am in the process of filing for bankruptcy.
My student loan dept is in my previous name, i have changed my name via NZ Deed Poll. Will they pick that up when i enter NZ boarders. My passport is in my new name. Never had a passport in my previous name.
Hii, I've only been here in Australia for about 3months and love it here but I want to know if I go bankrupt, will I be able to go home and come back? As im going for xmas??
Hi @ Hsvtec,
If you go Bankrupt you can enter NZ however to leave is not so easy.
The below information is a snippet of what i have been advised from Kristina Andersen (the accountant that many above recommend). Im sure it answers your concerns. :)
If you become bankrupt you will be unable to leave New Zealand during the period of the bankruptcy, without permission (regardless of which passport you travel on). If you remain overseas this won't be an issue. If you do wish to return to New Zealand for a visit during the time of the bankruptcy, it will be important for you to obtain permission to leave again prior to finalising any travel plans. It is likely that permission would be granted, however, this cannot be guaranteed. Permission is at the discretion of the Official Assignee but there are factors that are likely to increase the chance of success, including having a good reason for travel, that someone else is paying for your travel costs, and that you have been cooperative. The travel restrictions only apply to travel involving New Zealand. Please also note that if you do not deal with your student loan debt, there could be a risk of arrest, under the student loan arrest law, if you return to New Zealand. You should also consider if there would be any professional or visa implications for you.
1. No, only person who cannot afford to pay the debt . Partners income and assets will not be touched.
2. All NZ bank accounts will be closed. Australian banks do not care about NZ bankcrupcty.
For those got bankrupt from overseas how has the experience been being bankrupt or having undergone bankruptcy? By experience, I mean to ask has the OA contacted about your statement of affairs? What kind of inquiries have been made? How hard or easy has the process been?
Im a new zealander currently living in Australia. I was declared bankrupt by nz govt in april 2015. This was due to big student loan debt. Im trying to find out if im allowed to start a business in Australia ?? Can a NZ bankrupt start a business in Australia.
How long is the bankruptcy period?
My husband and I live in Aus and went bankrupt in NZ in 2014 and now want to move back to NZ to be near parents who want us back there as they miss the grandchildren and am wondering if we will be means tested when we start working in NZ and also if we will be able to take our cars back (mine is worth $20k)??
Also could we reverse the bankruptcy instead to be able to earn what we want in NZ? Like go back to having the debts under a summary instalment order? Or would this be pointless?
Some advice would be good :)
Hi kiwimumma it is 3 years in NZ
It is for 3 years after which you get released. Start fresh. On a side note, does anyone here receive calls from bay corp and other third party debt collectors even after being declared bankrupt? If yes, how do you deal with it?
Did Kristina advise you that you can travel overseas from Australia as long as the travel did not involve an outward journey from NZ?
I.e travel from Australia to Thailand but not Australia to NZ to anywhere else unless you have permission from the official assignee?
Did the NZ govt actually bankrupt you for defaulting on your student loan. They started the process? I've never heard of this happening before. Can you expand on this for us.
@Sonic the hedgehog
Yes, Kristina did advise that you can travel anywhere in the world without consent from the OA EXCEPT NZ.
If you plan to travel to & from NZ you will need to ask the OA for permission to enter & leave.
Kiwiinaus - i would not recommend going back to NZ while you are bankcrupt. You will not be able to even open a bank account and find difficultie finding a job. And forget sbout getting credit for 7 years. This means even a mobile phone...
You cannot reverse bankcrupcy, however you csn negotiate to pay out an amount and be discharged earlier. You can payout the entire amount you owe to creditors plus official assignee costs or negotiate lower amount which your credititors may accept.
However your credit history is still ruined
You only need permission to leave New Zealand while you are bankrupt. This does mean travel to other countries is not effected at all.
Thank you both for your quick response.
Anyone here who has knowledge /experience of being overseas bankrupt for 3 years or more and has been released successfully without much to and fro with the OA in New Zealand? How is life post Bankruptcy and how easy/hard has it been to start fresh? Do they come after you for your earnings after those 3 years? Any hidden complications?
Lots of good info here. Same story for me as many above: naive student loan in the early 90's has now led to a $75K debt which I am not able to manage the repayments on. I have 2 kids, and barely manage to make ends meet. I really want to turn over a new leaf and get my act together, but the debt I have is forever keeping me from crawling out of the hole. Currently, I am actually not managing to keep up with loan/debt repayments. Apologies in advance if I am repeating questions from above:
1) Does your Australian credit rating take a hit, if your are a Kiwi and go bankrupt in NZ while living in Aus?
2) Will defacto partner's assets be targeted?
3) If I declare bankruptcy and then later in life come in to assets (e.g. inheritance, lotto, pure luck etc) will these be taken?
4) How easy is it for anyone to find out that I would be a bankrupt? As simple as a quick google search?
5) I read that you can only own a car worth up to $5000 while during NZ bankruptcy. Would this be true if I was living in Australia?
6) For others who have already been through this experience, how has it been? What has been the worst of it? P.s. I currently have no assets and no real savings, so materially, it seems I have little to lose.
I've just started with Kristina - paid the $600 to begin bankruptcy proceedings. So far, I've had to fill out a form, send through payslips and bank statements, and haven't heard anything again (has been a week now).
My understanding is as follows (and i'll keep everyone up to date):
- Assets in AU or overseas have NEVER been pursued as a result of a NZ bankruptcy
- Credit rating in AU is unaffected by NZ bankruptcy
But - time will tell! Will update as I go along so as to hopefully clear up any false info that is floating around - you get a different story depending who you ask, it seems!
I am living in Australia and I have declared bankruptcy in NZ with my only debt being the student loan I took out in the 90s. I did a lot of research (mostly online forums such as this one and whirlpool plus the NZ insolvency website) and applied for bankruptcy myself. There is an accountant in Auckland who can offer advice but this comes at a fee which I could not afford at the time. It is actually relatively easy to do yourself so I don't see the need to spend money to have someone else do this for you.
In answer to your questions:
1) No your Australian credit rating does not take a hit. The Australian credit reporting system is for Australian debt only. An Australian financial institution would have to search your NZ credit record which they are unlikely to do. I should warn you though that the Official Assignee writes to any Australian creditor (e.g. personal loan) you have to notify them of your bankruptcy so they will be aware that you are now bankrupt in NZ. There is also a requirement that you must not borrow more than $1000 while you are an undischarged bankrupt without informing the lender that you are an undischarged bankrupt. So essentially even though it does not go on your Australian credit record your ability to obtain credit will be limited for three years while you are an undischarged bankrupt. I have just accepted this and moved on. Debt is what got me here so I don't want any more debt anyway.
2) I don't have a partner so I can't answer this one from personal experience. You do need to submit a very thorough budget and list all assets and liabilities. You could ask NZ insolvency - they are very helpful and approachable.
3) My understanding is that if you come into money in the three years that you are an undischarged bankrupt that the Official Assignee can seize those funds to pay your creditors. Once discharged from bankruptcy then any money you come into is yours to keep. I think there is info about this on the NZ insolvency website.
4) I have tried googling myself and my address and my bankruptcy does not come up. It does not appear to be that easy for someone to find out that you are bankrupt.
5) The same rules apply to you during bankruptcy even if you live overseas. As mentioned above you need to submit a detailed budget and list all assets and liabilities. The OA can request that you pay a certain amount each month and can even seize assets. An official information request was made and it does not look like they have seized any assets from Australia since at least 2009 (see https://fyi.org.nz/req...).
6) As far as my bankruptcy goes it is the best thing I could have done and I am glad that I have done it. Positives are: i) Huge sense of relief to not have "that impossible to pay loan" hanging over my head, ii) when Baycorp called me to discuss my student loan all I had to say was that I had entered into bankruptcy and that was the last I have heard from them. The only negative I have experienced is my Australian bank froze my bank accounts after receiving a letter from the OA advising of my bankruptcy (I have a personal loan with them). It was a very stressful day of making lots of calls to get sorted out. Once bank realised (with the help of their lawyers I'm sure) the NZ bankruptcy did not affect any Australian debt and that I would continue to pay off my personal loan as normal they lifted the stop on my account and things have been fine since. I also have to apply for permission to "leave" NZ whenever I go back. I have just done this online and permission was granted in a few days so no dramas there. I haven't made the trip yet but will update in the unlikely event that there are problems at the airport. At least I won't get arrested like I would if I still had a student loan.
It is a big decision to make and no two cases are the same. The bottom line is that the affect on you in Australia is minimal but there are a few conditions that need to be met during the three year period of bankruptcy and you need to be prepared for them. Best source of information is the actual NZ Insolvency website.
Best of luck. I hope I have been helpful.
2. No, only yours. For example if you own a house together, only your portion is considered.
3. No, after 3 years you're clean.
4. Its not google searchable, however it is publicly available on Insolvency Service Website.
5. Its case by case. A lot will depend on if there is finance on the car. For example, if you have a car thats is worth 90k, but finance on the car remaining is 100k.
6. There is a lot of information available on this topic. You do know what you getting into and there is unlikely to be any surprises. Just comply with OA. If you do not have any assets/ income, I'm not sure why are you waiting? :)
Hi All. Was officially declared bankrupt in early December and as of start of February started making payments to the OA. Be aware that they will go through your weekly income and expenditures and determine how much they expect you to pay them on a weekly basis ( in Aus $ too). Mine is large enough and and then there is a $18 bank transfer fee for each payment. I have been told to let them know if circumstances change (income) so they can adjust accordingly. If anyone has suggestions on a cheaper way to get payments to them, please suggest away. This payment will go for the three years. They issue you with a new IRD number and that is so far it. I did get a letter from the IRD saying that I no longer have a student loan (50k) so that made me feel slightly better. I had tried doing a settlement with the IRD but they were not interested.
If you have any questions please contact us:
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@Grampas Gruts - interesting, I never received a letter from the IRD stating I no longer owed them money. Granted they didn't know my address (the OA does though) I also didn't have to make any payments either so that might be why they haven't been in touch about a new IRD number.
@wheelbiz are you from the insolvency website? I'm sure govt officials and IRD would monitor this page. So it's good to see some of the actual honest commentary from people who are affected by the NZ Govts policies.
As an aside, I'd like to thank the moderators and admins of this site. This is perhaps one of the only places on the net that you can get real information about student loans bankruptcy from overseas without being flamed to hell on the message boards. It would be interesting to see the metrics on this page in particular. Thanks.
The information that this site provides is of comfort to a lot of people thinking about doing this.
Does the NZ OA check up on your Aussie bank accounts throughout the 3 years if you are based in Australia?
I am really considering pressing the button on bankruptcy. Am currently living in Oz with a huge student loan that i am unable to service.
Has anybody who has declared bankruptcy in Oz has had their their salary garnished to pay the OA?
I am assuming this will be done through an australian court order but from what i have read this has only applied to someone fleeing from family support charges.
Okay - so my bankruptcy came through two weeks ago (75k student loan) Just wanted to share the following:
- nothing has happened to my AU bank accounts
- I have a 20k car, there has been no enquiries made about it
- credit score has remained unchanged in AU
- process took about 3 weeks from application to being finalised
Thanks so much to everyone who has commented here. This info has been really helpful.
I wasn't able to find out this much info from anywhere else on the net, especially from first hand experience.
Hi AucklanderinOz, are they trying to garnish your income? - how was this discussed with the OA?
As others have said, the main issue is with banks stopping your account once notified by the ITS. Just about to head up to a branch to try and get account unlocked so we can pay bills etc..
Not overly hopeful but can only try...
I thought these answers helpful, but I didn't get a reply,
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.
How does it work if you change your name by deed poll and your passport is different?
Can you please advise who you went through please? I am seriously thinking of bankruptcy in NZ even though I live in Australia now.
Hi Fluid36. My income is around the $80k mark. No income garnishing, as I had to put together a budget which outlined my expenses which resulted in a $0 surplus. She mentioned that if there was any income left over, they could ask for contributions. Also of note, I wasn't asked for any proof of expenses.
They can't block your account in Aus, it only happens due to a mistake from the Aus Bank not understanding the laws and getting mixed up with Aus bankruptcy, when you go in they will unlock it straight away.
Their main concern is the garnishing of income so we need real life examples of how and when this is enforced please.
Hi Bonbon: I used Kristina Andersen via the student loans website www.student loan.org.nz She took care of it all, didn't have to deal directly with the nz government at all.
Garnishing of income is not a concern at all. Like a few others have mentioned you will submit expenses and income and Official Assignee will let you know, how much you have to pay back (if anything) on monthly basis.
The only way garnishing would happen, if you do not comply. To garnish, they will need to get court order and transfer it here to Australia.
Blocking of accounts will happen again, if you do not comply as above with income garnishing.
------ regarding making payments back to OA
Regardless of your availability to pay back, even if you declare that you cannot pay back OA can still request payments. This usually takes a few months before you get notified. You can fight back, but you may end up proving your expenses as normally you do not need to prove most of your expenses.
Also if your salary is high, regardless of your expenses, you will be required to pay.
Were you asked to provide proof of income (pay slips etc)?
I thought you had to provide bank statements as well, did they ask for these?
If they had your bank statements I would have thought they would calculate your expenses from them.
Hi AucklanderinOz, Can I ask you if you own a house in Oz? Was any enquiry made into it if so? Thanks
Fluid36 - yes, had to provide 3 payslips and bank statements for the last 3 months. Everything matched up.
Marmite - no house. I live in Sydney so that's never going to happen!! The only major asset I have is a car, no enquiries into it.
yes I understand how it works but what evidence do they require from you for proof of income and expenses. I.e - what is to stop anyone from pulling a number out of thin air?
I was reading official information act request and there are a number of people who have claimed bankruptcy and not even given address details to the OA, meaning their address is listed as "unknown".
If some individuals haven't even given the correct address details I would say that they would definitely not have accurate income details.
Has anyone lost their house in Australia when declaring bankruptcy in NZ , I declared bankrupt about 6 weeks ago...I would like to sleep easy
Thank you to everyone who has shared information and stories here, it's been incredibly helpful hearing of others in the same boat, and also not coming across the huge wave of angry judgement that seems to pop up on other forums on this topic.
I'm another one with a student loan from the nineties that has been blown absolutely out of my control to terrifying levels (I don't even want to say the amount it's so horrific.)
I have two questions for anyone who's gone through the process:
1. Along with others I find the $1000 rule confusing. It's not a problem now as I have hardly any $ but I'm trying to work out if I apply for bankruptcy in NZ whether I'm allowed to then accumulate any savings here in Australia during the three years of being undischarged, or whether they would be at risk of being confiscated along the line at all. I'm assuming no, being that they'd be modest savings at best and it seems they'd require a court order to do so, but I've spent so many years being scared of the IRD seizing anything I ever acquire, it seems too good to be true that I could finally start to rebuild!
2. I believe the rules state that any tax returns owed are counted as "windfalls" and must be declared and given towards the debt. That makes sense in NZ where the IRD are authorised to directly hand any tax return directly onto the insolvency service, but what about Australian tax returns? Has anyone had this requested of them?
Thanks again to everyone for providing information and sharing their stories. There's a lot of shame and fear going on out there...be kind to yourselves...
Its not out of the thin air because you will provide:
*bank statements from all of yours and joined accounts
*you will provide payslips
*you will provide statement of affairs where you list all your income and expendetures. Your income will be quite clear to them, expendatures are broken into 2 categories however.
1. Estimate for a person/ family + children and other variable expenses like food, petrol etc. They have a table and they really work this out for, regardless of what you declare. If your estimate is to high, they will ask for proof. This is when you start calling your OA :)
2. Expenses that is consistent, for example rent/ loan payments. You will provide statements, rentsl contracts, etc that proves the expense. Its will unlikely be questionable.
You must give OA your address snd they will post you letters. IRD will always issue you with new IRD number and post letter to the same address as you give to OA.
Firstly, thanks everyone for all the info you're providing.
I'm another ex kiwi who stupidly applied for a loan then left NZ twenty something years ago.
Im considering this as an option but I'd like to know if you guys own (mortgage with some equity) homes and has the OA shown any interest in going after these?
I can't see another way out of this but don't want my family to lose their home.
I'm over halfway through my bankruptcy and just received in the post a blank tax return form. Anyone else received one of these from the IRD?
I'm assuming as I'm in Australia that I don't need to fill this out. I didn't receive one last year after the tax year so I'm not sure why I was sent one this year.
It was addressed to the official assignee for the bankruptcy of "The Universal" and my address below. Not sure I want the postman knowing my business...
I'm in exactly the same position. I've spoken to Insolvency NZ and Kristina (who people refer to on this page, company that handles bankruptcy for you) and no one can give a guarantee that your home will not be touched. Insolvency NZ did say that NZ'ers living in Aus are less affected but again, no guarantee. They explained that an assessment would be made into the equity of the house and the costs of employing someone overseas to handle the sale. Remember they can only take into consideration your half of the equity.
I need to make the decision whether to go ahead in the next couple of days. Have you started the process?
Still keen to hear updates from any others currently going through the process who owned property.
Just received my letter of confirmation regarding my bankruptcy application today. It was definitely a few weeks of sleepness nights waiting for it but worth it. My advice would be if you are facing financial hardship and genuinely can't service your debts then seriously consider filing for bankruptcy. Bankruptcy applications being on the rise I'm pretty sure they will make some changes very shortly to make it even harder to apply.
Don't be ashamed of being bankrupt it is a position anyone could easily fall into in this day and age. I have taken this bankruptcy as a an important educational lesson about finances and will use it as a tool and reminder of how money should be used in the future.
It's not easy filing for bankruptcy but it's a solution to a problem which is important and worth the struggle, best of luck.
as a recent bankruptee in NZ i can say it is the best thing you can do especially if the creditors include IRD and credit cards, you will generally NEVER EVER catch up with those debts once they get to a position where all the parties are calling you every week and sending you letters leading up to a statement of claim.
If your total indebtedness is below $100k then generally the OA will just sign it off and your are done. There may be some simple questions about assets and income but being absolutely straight and honest is the only way to go there.
the good thing about NZ insolvency law is that it leaves you able to continue with some hope of a future while locking out all the creditors and forcing them to line up behind the OA, the calls and letters will stop immediately.
You can keep any car worth less than $6k, you can stay employed or be in work and earn up to $36k and keep all of that, the OA may examine any earnings above that and take a portion for distribution. You are asked about any assets in your name worth over $5k each, but i expect that if you are in a position where you are reading this then there aren't any.
Generally, in all cases, i recommend advance financial planning if you think you are working in an area that could in future expose your assets to any risk and if practical make plans to isolate any assets in a family trust in the very beginning, more than 5 years ahead if possible, because thats how far back the OA can look, but be sure that you are not a trustee or beneficiary of the trust, you need to be well away from arms length of any assets.
Bankruptcy in NZ is 3 years in which you will have to ask the OA to travel outside NZ and you cannot obtain credit or obtain electronic access to any account in your personal name, but you may be able to keep a bank account if you already have one and it is not in default, because you need somewhere to send the welfare cheques, you will just have to get to a bank branch to withdraw the funds. Generally i found that no bank will create a new account for you once you are bankrupt.
It is not so bad and it draws a line under what may have been a very prolonged and stressful existence otherwise.
Consider all the issues before making the final commitment, but then just get on with it, the online web application is very well structured, just take your time to dot the i's and cross the t's, then mark the date in your calendar 3 years from now when you will be free again.
Say worst case scenario, I return home and am arrested upon arrival due to non payment of my student loans. Prob owe about 40k.
Then what ?
Am I charged with an offense ?
Is my PP confiscated ?
Am I still able to leave the country afterwards ?
Being arrested would not bother me too much, I mean dont get me wrong, Id rather avoid it if I could. However being charged with something would well suck, as I don't have a criminal record and would like it to stay that way.
Hey, i am thinking of going bankrupt back home, i need some more info, myself and my partner are just on 100k in the black, i want to go bankrupt so i can fly home to see my grandparents, know i would like to know a few things if you can help.
1, can i go bankrupt by myself
2, can aussie debt collectors company pay the debt from nz so dos that mean do i own the money here or in nz?
3, would anyting happen to my aussie account and car here?
any help would be great, as this starting to eat me alive now
Ta, Trying to start over
Found out today through a random message from baycorp that I owe $42,000 on student loans. Can't believe for the past 5 years I've been in Australia they haven't been able to contact me but could add on mega intrest. I make no income but get a fortnightly family tax benefit payment, the problem is my partner and I have a joint account and both signed for our car. We have two kids already enough bills to eat through his weekly pay and was wondering if anyone in the same position have had the collectors touch/take money and cars in joint sigmatures even though he's not the one going bankrupt. Also does going bankrupt effect renting or shall I just make him the main tenant and not sign on to keep things simple.
I am a Kiwi living in Sydney and am considering filing for bankruptcy in NZ over a large student loan debt that I have no way of paying off.
My question is, will my employer here in Australia be notified of my bankruptcy in NZ?
My bankruptcy came thru for my 83k student loan jn March. Employer hasnt been told, nor has anything happened to any of my bank accounts or credit cards in Aus.
You can go bankrupt and it won't have any effect on your AU assets, whether they are just yours or joint. There is not a single instance of the NZ govt seizing overseas based property. It wont effect your ability to rent either, so you can stay on the lease.
Kiwi73 I declared bankruptcy in Australia about a year ago and my employer was NOT notified. There is no reason for the OA to advise your employer.
I would like to warn you though that my bank in Australia was notified of my bankruptcy in New Zealand. The OA advises any creditors (including those in Australia) that you have been declared bankrupt. So if you have a personal loan or any other unsecured debt be prepared. My bank stopped my accounts and it took a day of phone calls back and forth for them to lift the stop. I have since been operating my bank account and paying my personal loan with my Aussie bank as normal. If I was to do it again I would have opened an account with another bank for my salary to go into before declaring bankruptcy. (It was all sorted in the end but it was very stressful).
We are living in auz. Have a personal loan with bank back in nz. Still nz citizens. We have a insurance on the loan that covers Death trauma and bankruptcy. Does anyone know how to go about declaring bankruptcy on this loan? Would it effect us over here? My husband works and I don't. Would his super be safe?
Can Aussie debt collectors can go after you for a NZ debt? And if I go bankrupt in NZ would that stop the Aussie debt collectors??
Hi KiwiinOz and JaNZ,
How did you go two about it? Did you do it through a company in NZ or do it yourself online?
Also, do you know if you can be a Director in Australia? I read somewhere they can cancel your ABN or ABR. Thanks in advance!
All Australian Super is safe from New Zealand bankruptcy rulings. If you had Super in New Zealand then that would be forefitted to the OA in NZ. Something for people who want to return to NZ within the initial three year period and if you wanted to take your Super with you.
If your husbands super is in Australia it's safe. If it's in NZ and he wants to declare bankruptcy then I suggest you think about moving it to Australian before you decide to look at bankruptcy.
Like most I made a stupid decision to borrow for a student loan $30K and after 20yrs of living overseas (believing that there was no interest accumulating- little did i know that that wasn't the case if you lived overseas) it is now $140K. I didn't work or earn much for 15yrs of that time.
Now i have a business, but still don't have the arrears they are asking for! they have declined for financial hardship.
I do earn good money, but i also am a single mum with a child at a private school. I offered to pay the original loan amount and happy to pay $5000 a year but they want the $50K overdue which i just don't have! I don't have other debt other than debt to my parents (which is quite a bit too), my mother owns half my house (but house not in her name as she gave me the money 2-3yrs after i bought it) and changing names would have cost because of stamp duty so we decided not to bother. I only have the deposit on the house as mums money was used for renovation and a loan to the business (which i part own).
I am really stuck with what i can do here, they wont negotiate at all and i dont even know if i can go bankrupt in NZ due to being a business owner in Australia? I don't think they can touch my house because its being used as security by the banks in Australia due to business loans, the house is not worth much anyhow and i only have the deposit as equity. Can i declare bankruptcy if i am a business owner in Australia? will that affect the business in any way as i have a business partner to think about and we do have large overdrafts/loans with banks for the business. I dont own anything else.
Wow you must be in the whole ton of stress.
Your situation is extremely difficult and you need to seek professional advise as soon as possible. If you read through the forum, you will find a lot of very useful information, however your case sounds quite difficult and contacting Kristina Andersen or another lawyer would be your best bet.
See links below:
In addition my 2 cents
You cannot run business when you're bankrupt and Official Assignee may actually refuse your bankruptcy application if you're earning too much and can pay IRD and avoid bankruptcy. It comes down to IRDs aggressive approach by demanding 50k, which unless you actually have free in the bank(based on IRD reviewing hardship application)is totally ridiculous. This is when you need professional, who perhaps can negotiate this for you. Hardship applications can apply for past years as well and it may come down to reducing a lot of penalties but not interest unfortunately.
Also remember, IRDs aggressive tactics works for people living in Australia, UK and perhaps US. As crazy as it may sound, moving to another country temporary and declaring bankruptcy from there, makes IRD and OA pretty much powerless.
Think of the best case out of the negotiation, you will end up with massive repayment probably for many years to come. Also, say you can afford to pay 2.5k a month now, but in 5 years you cannot. Which means, you loan will just start increasing again and you will never pay it off, having IRD back on your back straight away.
Has anyone else applied for bankruptcy from Australia who owned there own home (mortgaged)
I am considering filing for bankruptcy in NZ due to my $70k student loan but I am worried they might force me to sell my home to pay the student loan? My house is in my wife's and my name.
Any advice or info would be appreciated.
Currently bankrupt best decision I've ever made. All I was wanting to know is how long does it take for a travel request application answer? Cheers
From what I have read is that the OA has not pursued property in Australia to date. If anyone knows differently, I would be interested to know.
However, I sought advice from insolvencyworks.com.au on this very issue. The advice was as follows:
1) The first creditor on your house will be the bank that has the mortgage. Once this is paid, the remainder would then be 50:50 between you and your partner.
2) Question is what is your house worth? You can get your bank with the mortgage to assess the value of your house (this will be usually be very conservative - not necessarily reflecting what the market is at the moment). You might have to pay for this assessment.
3) once you have this assessment you can do the math and work out what the IRD could potentially go after. Hopefully it is not very much making it less attractive for the IRD to spend a lot of money in the courts of Australia to get you to sell etc. Also what I understand from insolvency works.com.au is that bankruptcy is not in the business of making people/families go homeless.
4) I would seek their advice and for a reasonable fee they can help you protect your assets for a reasonable fee, should the IRD begin the process.
NB: I have no association with insolvencyworks, but I did get their advice or someone similar.
Would be interested to know of any one else's experience on this issue.
How good does it feel huh!!?! Re travel permission, I applied for this Christmas and it was approved in 4 days.
My travel request took about a week for a visit back to NZ for work. Easiest way is to apply online. No hassles or problems at all.
Has anyone had their income garnished or been asked to make contributions? Can you please give details of the process?
Yes - I have to make contributions which are paid monthly. Initially the amount asked for was way out my range, it was negotiated to a very manageable amount (about $20/wk).
No income garnishing though - this is all done via an international BPay that I initiate.
Thanks for the reply AucklanderinOZ,
Do you mind me asking how they calculate the amount you pay and how you managed to negotiate it down? Do you have dependents? What is your income range etc?
I'm wondering what would happen if you also refused to pay and if they would bother initiating a court order to enforce it.
Hi - so I have no idea how they came up with their initial figure (which was more than the student loan amount would have been). I simply said no, that it was unreasonable and that they could have $20 or nothing. I went thru a tax agent so didn't actually deal with them directly.
I have no dependents, and earn circa $65k.
Official Assignee uses the formula, based on your income, number of dependants, etc. (computer generated)They completely disregard your situation or total amount that you were meant to pay back to IRD.
You would negotiate the amount, by proving that tou cannot pay asked amount. This usually works out fine if you cannot pay.
You would be stupid, if you refuse to pay. You need to act in the professional manner and its in your interest that you get minimal attention from OA in the 3 year period :)
Im thinking of applying for bankruptcy in NZ as I feel that I can't service my student loan. To be completely fair I feel that the user pays system in NZ easily takes advantage of young students eager to get ahead. What's with offering many $1000's on top of the loan that has such a high interest rate??. They have been running this scam for way too long and its time they got put into line.
Do they have the power to see how much you have in your Aus bank account? I have a small amount of saving that I'd rather keep from them. If I do declare bankrupt can I simply show them the account that I want them to see? or do they look at tax returns to see if there was interest gained from savings?
Thanks for the replies AucklanderinOZ and Itsnotfun, the calculation they use is based on NZ income and cost of living so I assume they take into account the location.
Also I don't see any negative impact in refusing to pay, if they are so quick to accept a lower amount then obviously they are aware they have no way of enforcing it (would require a court order in Australia which would not be possible due to cost of court dates and NZ Student loans older than a certain age being statute barred in Aus).
Hi Sleepless nights.
I claimed bankruptcy in April as I had a student loan debt in excess of 100K. Wanted to repay as well but had no financial means. I went through Kristina Anderson - best decision ever made. You have to fill out some paperwork - and your bank accounts cannot have more than 1000 dollars in it. All very straight forward. I would not even consider going down the negotiating with IRD road. Tried that and they wanted everything.
Perhaps with some planning you can move your funds now as you only need to show 6 months (or was it three months?) of previous transactions.
You can also read above through previous posts that you will/may have your bank accounts frozen in Australia but can be cleared again without much hassle. I did not have this issue though.
Going bankrupt has meant no more sleepless nights though thats for sure. Best thing ever.
Hi guys is anyone currently/recently dealing with a bankruptcy proceeding and has some equity in their property in Oz?
I was wondering if there has been some change in policy or law regarding overseas bankruptcy and assets?
All the information we have been reading on forums, FOI and from Kristina is that the ITS had not yet ever forced someone to sell their home in Australia and were unlikely to do so due to the expense of court proceedings cross border.
We became bankrupt as a couple in December. We have not been asked to pay any of our regular income yet.
We have a home with a huge mortgage but some equity.
We were asked by ITS if our family could buy out the equity in our home, but this is not an option for us.
On the phone today we have been told by ITS that they will make us sell our home to get the equity by transferring the bankruptcy to Australia. I thought this wasn't possible?
We have the uncomfortable idea that a change in policy somewhere has led to them wanting to make an example/precedent with our case and are really concerned.
We are wondering what their court proceedings would be likely to cost and if it would cancel out the value of the equity anyway so why do it now?
Any advice or current info would be hugely appreciated.
This is a little confusing. Did you become bankcrupt in New Zealand? ITS is dealing only with Australian bankcrupties and i don't understand why they contact you at all.
OA would never make an example of someone. Unless there is any financial benefit it will never go ahead. It would easily cost 20k to make application to sell your property. This would mean, that equity you have covers all of most if the debt. They would never make you homeless, because they don't like you.
Having said that, if you became bankrupt in Australia, its different story
I am currently going through kristina now but she never said this could happen ive not had a reply yet ,i have a very small amount of equity in my home devided between my wife and i would be less than 20k what was you debt for them to be so aggressive.
Sorry, I have re read your post and also did some further research. It seems like, enough pressure from Mr Joyce have made some massive difference and OA now aggressively chasing overseas property.
This article, says a lot where its all coming from and Joyce is having a long battle with student loan defaulters and taking it to another level.
If you had recent advise from Kristina, she would have noted, that OA have recently started actively chasing overseas property.
This is also quite evident on ITS website, there is no doubt that message is being sent to us
I don't know, why they would force you make you bankcrupt here, i don't think its needed and I would seek legal advice. You can probably negotiate with ITS and set some high repayments to perhaps save your property. But who knows what OA will do....
This is concerning.
Is it only if you have a house you should be worried?
As you can't get the dole as a Kiwi in Aus, I would like to try and save an emergency fund for my own peace of mind if I lost my job.
Would I be at risk of this being confiscated?
Hi, my questions are for people who live in Australia and has successfully applied for bankruptcy in NZ. Have you become an Australian citizen now or are you still travel in and out of the country using an NZ passport. I currently live in Australia but I never apply to become an Australian PR or a citizen; and I have always used my NZ passport to go in and out of the country. I recently get contacted by NZ IRD saying that I owed them a HUGE student loan (after 15 years not been contacted). I'm looking into the bankruptcy option but am worried that I no longer able to travel if I apply for bankruptcy. Can you please help me to shed some light on this matter?
Any help and advice are greatly appreciated.
Another question to people who have dealt with the IRD directly, do any of you have any success in negotiating the loan amount to a reasonable/affordable amount to avoid going down the bankruptcy route? If so, can you share your experience whether you engage 3rd party like a lawyer to help you to negotiate with IRD?
Thanks so much again for your help and insight into this matter.
Hi all, I just want to let you all know that if you declare Bankruptcy in NZ, your credit history in NZ will show up in Australia as it is the same Veda system used. Perhaps use a budget service like My budget to work with you in resolving debt issues, including any debt owed to IRD.
I tried to negotiate a one off lump sum payment with IRD that was 60% the value of the loan. I was going to borrow this amount money off parents as I was (and continue to be) in no way to meet the >10,000 dollar per annum payments. I went through a lawyer but they refused the offer and so I went down the bankruptcy street. My feeling is that the loan will never go away. It will only increase with interest and the higher it gets the more incentive IRD has to go after it. Bankruptcy at least drew a line in the sand at a set amount to deal with and I guess not get any bigger with interest. Not happy about doing the bankruptcy but was only option left.
Hi guys, I have just been declared bankrupt. I don't own a home in Oz so my application was pretty straight forward. I didn't have the $650 to pay Kristina so I did it myself thinking that if it got rejected I would try to save up and do it through her. It took 2 days. I sent it on Thursday and got an email this morning saying I had been declared bankrupt ( found it surprising that they sent an email on a Saturday)
I just wanted to let you guys know that in my experience it wasn't as difficult or stressing as I thought it would be and that you can do it yourself for free as long as you don't have many assets to declare. In that case I would recommend getting legal representation.
I feel like a huge weight has been taken off my shoulders. I hope my story can give some hope to the ones despairing on here.
Response #153 sounds like the IRD trying to scare people, doesn't it? Surely they wouldn't take the time to comment on here would they?
Then again it is the infamous IRD we're talking about.
I wonder if it is an IRD employee who wrote that if they did it during work hours or at home Friday evening.
That would be sad lol
(If you're not IRD then I apologise but your wording is very suspicious. Not to mention referring to My budget!)
@Kiwi I am currently bankrupt in NZ and have checked my Australian credit report through Veda and it is not listed on there. It would only show up in Australia if a company were to check your NZ credit report but that is unlikely.
Can Aussie debt collectors can go after you for a NZ debt? And if I go bankrupt in NZ would that stop the Aussie debt collectors??
I am looking to go back to nz in may for a family do... i would like to know my options
if anyone can help that would be great!
@ IRD neg fail, does that mean that you will pay them the 60% and be declared bankrupt?
That's terrible. You made an honest effort to pay as much as you could in a lump sum to avoid bankruptcy and they said no so now you end up paying it AND being declared bankrupt.
Seems there's no middle ground with them. Makes people feel that the only sensible thing to do is just declare bankrupt and not pay anything. I am a borrower struggling to pay my loan too, I understand that we made an agreement to pay back and the fault probably lies with us. But the system is broken. I actually think the best thing that could happen is a huge wave of bankruptcies being declared. Hopefully it makes the government rethink the student loan system and future generations will get a better deal. It's also pretty annoying that many of the people running the IRD and the government didn't even have student loans and got free tertiary education!
There's a few misconceptions and fears on here - so I wanted to share my experience.
My student loan was at the high end of the 80,000 bracket.
I earn the average AU salary - however living in Sydney that means I'm poor.
Tried to negotiate with IRD (eg pay back the original loan amount, no interest), was turned down and then referred to Baycorp.
Declared bankrupt (60% because I couldn't afford repayments, 40% as a middle finger to the IRD)- was asked to make a ridiculous contribution (that worked out to be more than the repayments would have been). Said no. Offered $15/week. They said yep.
Has had absolutely no impact on AU credit rating or bank accounts
Have travelled back to NZ twice on NZ passport, got 'permission' both times.
I have a car worth about $20k. They know about it and haven't done anything about it.
My advice to anyone considering it - DO IT. I'm just annoyed I didn't do it sooner.
My bankruptcy was approved last year and my experience was very similar to that of Boatperson above.
$30k loan, more than two thirds of that amount was interest & penalties. Offered to pay back the original loan amount + reasonable interest, got the IRD equivalent of 'lol, no' then started getting hounded by Baycorp via letter, email and phone so claimed bankruptcy as a last resort.
I'm broke with no assets (got cleaned out by a meth-head relative that I tried to help out a few years ago), so wasn't asked to make repayments, but as a caution to anyone else, they can ask for 12 months of bank statements (for ALL accounts with ALL banks) to make sure you're not hiding anything. They were extremely thorough, I would strongly advise against attempting to hide assets. Keep it honest, otherwise the next 3 years of the bankruptcy period will be very stressful.
You're required to sign a document at the end of the bankruptcy application process acknowledging the penalties if you attempt to deceive the IRD or hide assets. Even preparing to hide assets is illegal.
You will be required to keep the OA updated with any name/address/income changes so that they can reassess your repayment requirements. Any windfalls of cash, including inheritances and tax refunds, need to be reported as they are property of the IRD during the 3 year bankruptcy period.
No impact on AU credit rating or bank accounts, but kept a small cash reserve for expenses just in case my accounts got frozen based on advice from this thread.
I'm kicking myself for not doing it years ago when I first moved to Australia.
I went through Kristina, who made the process less stressful than it would have been if I had tried to tackle it myself, would recommend her services.
Hope this helps.
Brokekiwi, thanks so much for sharing your information. May I know whether you did the initial negotiation (renegotiate the loan amount) through Kristina or by yourself with the IRD? It sounds silly that the IRD won't negotiate at all and rather get nothing than something back!
I went through Kristina to try to negotiate with the IRD before considering bankruptcy. Like another commenter above, I was willing to work a bunch of overtime, take out a small personal loan and get help from my folks to pay out the student loan, if it wasn't comprised of 200% interest & penalties from the original loan amount.
The response from the IRD was pay the whole arrears amount (about 90% of the loan) within a few weeks and they'll remove the most recent penalty fees, but then went on to threaten another penalty fee if I didn't. Then the Baycorp harassment started (which, to answer another commenter's question, is an AU debt collector chasing NZ debt).
I would still be happy to pay back the original amount + reasonable interest (not 200%), but under the bankruptcy rules, I can't incur any new debt/loans. While the bankruptcy provided some relief, it still feels like a stalemate because there was a much better option for both of us that wasn't explored.
Sorry, I should have been more detailed. I did all my 5 years of uni in mid 1990's. The worst time - interest from Day 1 etc etc. So finally with loan in excess 100K, I tried to get things sorted. I could pay 60% value of loan (80,000 NZD lump sum) via borrowing from parents. IRDsaid no. So I did not pay anything -just declared bankrupt. Also like recent replies, I had no assets so was not too much hassle in getting it through. I went through Kristina as well who did IRD negotiation - highly recommended -even if it did not eventuate to anything. I have one year bankruptcy under my belt, 2 more to go. Like others - I should have done it earlier! I would also recommend bankruptcy - I suspect that legislation changes are only a matter of time.....
Thank you both, BrokeKiwi and IRD neg fail, for sharing your stories and experiences dealing with the IRD. I'm just sad to hear that IRD is so unaccommodating in negotiating the loan. It does sound like bankruptcy is the only way to go. All the best to both of you and thanks again for sharing!
I have recently been declared bankrupt. I had an 80k+ student loan and a $4k unsecured personal loan. I have a question that I can't seem to find an answer to. Do I need to send the Insolvency Notice to the IRD and the loan company myself of will they be notified by the OA?
They'll absolutely let the IRD and all other creditors know so don't worry about it!
I am originally from NZ but have lived in England for the last 14 years. I have a perfect credit rating in the UK. I have just moved to Australia and have now been in Australia 3 weeks. It is my intention to settle in Australia. I have a student debt that I know will be ridiculously high and am now taking the plunge and taking steps to face up to and address the debt I have incurred. From what I'm reading the IRD are not very reasonable. I'm not working as yet, but I do have some savings. And will need that to survive on whilst I set myself up in Australia. Chances are I will declare Bankrupt and from what I'm reading I will need to provide 3 or 6 months bank statements. I'm wondering as I've only been here in Australia 3 weeks and have just opened a bank account here, but I do have 3 months bank statements from the UK I guess this will have to do. I also have no assets. I do not want to divulge my savings for without that i won't be able to survive whilst i go looking for employment. But i guess they will know about my savings when i declare which bank i am with. Anyone have any advice on how to proceed. I guess i could pull out my savings and close down the account.
Hi Back in the Southern Hemisphere,
First step I would take is contact Kristina Anderson - she will help you navigate the paperwork for a very reasonable fee. She helped me but forget the IRD negotiation route.
This paper work includes an extensive budget exercise and as you have no job currently then your savings could then cover your living expenses. Of course, if you have a lot of savings, the OA will ask you to make some sort of regular payment. However, whilst the IRD are not negotiable, the OA maybe more so?.
If you do not have assets then this is good. Of course, once you get a job and any assets in your 3 year bankruptcy you must inform the OA, who can then reassess your ability to pay off debt (as far as I understand). For example, imagine you won a lottery, then the OA would ask you to pay back your debt. Also if your new job has high remuneration, the OA might also again ask for payments. If you have a family etc, this all plays in your favor for budget
Finally, not knowing your situation exactly, the OA can reject your bankruptcy if you debt and finances is not that dire. So be aware its not a given. I also assume the IRD and or OA probably check this website.....
At the end of the day, I would declare bankruptcy sooner rather than later as well. With the tide of bankruptcies increasing, there appears to be more and more political pressure to change how this is being handled to prevent more defaulters.
Good luck, best decision of my life was to go bankrupt.
I have a 44k student debt from the 90's and jointly hold a large mortgage on our house with my wife. I cannot afford to pay what they are asking on top of my existing bills and haven't been able to sleep since I found this out. I'm feeling sick knowing about this debt that I don't have the means to service.
I would love to hear from other joint mortgage holders in Australia that have gone the bankruptcy route in recent months and whether they have lost their home.
I've read this article which says there have been 5 instances of this occurring in recent years.
I have an inquiry about my NZ student loan. I finished in 1999 with a total loan amount of NZ$19,000. I have totally forgot about and got carried out with life specially I suffered from few health problems which ended up my professional career 10 years ago.
Anyway, I was surprised with Baycop Australia approaching me last week seeking an amount of NZ$110,00 and threatening to escalate the matter further.
I contacted the IRD trying to negotiate with them a fair amount ( original loan plus reasonable interest) however they were not willing to drop it a dollar !
They are asking me for at least half the amount now and the rest in installments.
I would like to know if I can declare bankruptcy in NZ ? will this be enough and waive off the loan without any implications in Australia?
Does Baycorp have the right to pursue it further and force me to declare bankruptcy in Australia ?
I am currently on the Doll payments and have 3 dependent children. I have no assets or savings but bankruptcy in Australia is very severe and will dent my rating.
I appreciate any advice on here.
Hi Suffered Mum
Contact Kristina Andersen in Auckland, pay $600 and your student loan will be gone in a week. Read through the above. It's easy, I've done it, and the only regret is not doing it sooner. Yeah ur credit rating in AU is untouched (I got a personal loan earlier this year with no issues). JUST DO IT before the NZ govt change the laws.
Also Suffered Mum,
Have a good read of the posts detailed here. You do not need to go via Kristina. I didn't and the process was pretty easy and painless. Plus, it didn't cost me anything.
NZ bankruptcy does NOT effect your rating in Australia. I've checked Vero twice since my judgement and i'm clean as a whistle in Australia.
As per @justdoit above. I wouldn't be surprised if they change the rules soon. I saw an article the other day saying that there had been only 18 Student Loan Bankruptcies last year.
I call complete BS on this as I know two people who did this personally. I bet the figure is closer to 18 people a week than 18 per year.
For those people that have gone through it, what do you do at tax time?
Do you give the oa your tax return or would they not find out about it?
My experience is pretty much the same as many others who have commented. A large loan, no real assets or ability to pay it off as I have a family and not a high paying job, and the IRD being totally inflexible in my attempts to pay it off. So I contacted Kristina who did a wonderful job, and now I don't have to worry about it.
Given the press it does sound like the NZ government may change the rules in the not so distant future to try and stop bankruptcy as a way of eliminating student loans although I'm not sure how they can force people to pay money they don't have.
Re:tax time - I ended up owing the ATO $1500. Tried to give that to the OA abut they weren't interested in taking it on...
@postbankrupt I made contact with the OA and I had to pay them my tax return.
I've lodged my application on 7/5/17. I've been in Australia 14 years, my student loan was $55k no capacity to pay for the first 6+ years that I lived here (wish I had done it then), then I basically avoided it altogether for fear of it. I'm settled in Australia now, with no intention of moving back to NZ. With media reports about arrests I figured I'd simply never head back however, I have some close family members who are unwell and I may need to head home for a visit, I figured I'd address it and see how much I owe. I used Kristina to obtain the information for me.
With penalties and interest I owe almost $150k with the ability to wipe off approximately $20k, paying at the minimum amount would see the debt continue indefinitely. My income is relatively high, debts in Australia are hardly anything. I've submitted my application knowing that, if my home circumstance changes (one income family) if debt collectors where to come calling, or I had to return home and was arrested I would not be in a position to pay the arrears. Assets are nothing of substance. I will keep everyone posted with how it all pans out, I believe the OA has the potential to garnish my income however to enforce in a foreign state isn't a simply process.
I'm in a similar situation as you and haven't made the decision to apply for the bankruptcy yet. I'm grateful that you are willing to share your experience here in this forum, that's so helpful. Please do keep us all posted on how it goes with your application and with your experience with the OA. This has been bothering me for a long long time and keeping me awake at night, not knowing what is the right thing to do.
Thanks again for sharing!
Just one question in regards to hopefully applying for this new permanent residency pathway melcon turnbal announced last year for New Zealand citizen. Is anyone aware if bankruptcy in nz would effect an application being approved for this permanent visa? This is not the scv we automatically get when we enter Australia. It doesn't open up until July.
Update regarding my bankruptcy application, once submitted I was then asked to provide 12 months of bank statements to date in conjunction to responding to a series of questions. The questions were simply seeking clarification about my financial situation such as pay cycle, currency I am paid in and explaining my food bill. I provided a response to the question quite quickly and have just now forwarded through my bank statements.
Well I'm bankrupt. It was a relatively seamless process. Oddly, part of me thought it would be declined and that I'd have to make payments forever but I can see now that's not the intent of bankruptcy. It recognises your debt with the intent of freeing from it and where possible realising the assets that you have at the time and the 3 years following in order to make some contributions to that debt.
Like others in previous posts, I wish I had done it sooner especially when I was unemployed. I'd feel less guilt about it however, its done.
Hi @keepitclean how did you go about it? Did you use a lawyer?
Your three years will be over before you know it. I was reading this forum post a few years ago and went through the process (by myself) and i'm four months away from exiting. I've had no repercussions since.
I'm also thinking about going bankrupt in nz. I have a $43k student loan, $18k personal loan and $6k credit card. There's no way I can make any repayments as I'm on a low income here in Aus. I have only been in Australia for about a month - is it too soon to be able to go bankrupt? I thought about doing it while in nz but knew I wanted to move here for a fresh start. I don't have a house or any assets or a car even. I just really want a fresh start and feel there is no other way than filing for bankruptcy. I want to study here in Aus to become a nurse but would be impossible to do with my current debt in Aus. I've read a lot of comments on here and it seems fairly easy to do over here with no reprecussions here in aus. I've seen people also mentioning payments to an OA? What is an OA? Also if you end up moving back to nz after your 3 years, are there any reprecussions when you get home? Any help or advice would be greatly appreciated!
Sorry I meant current debt in nz not aus*
Hi, Just wondering if anyone has any experience going bankrupt while owning a house in Australia? I bought it two years ago, so not much equity (approx $45k). I owe $65,000 on my Student loan ($35k borrowed + $30k interest). I'm currently 4 months pregnant so am earning a fair wage now but will be on maternity leave soon and then will take at least a year off, so will have little income. Probably just enough to cover the mortgage + expenses. Bankruptcy seems like the only option but worry I'd lose my home and then face the uncertainty of renting, especially with a newborn.
Lockwoods Myth, how did you go with ITS? Did you end up saving your home?
Your case seems like to most extreme out of everyone who posted here since 2011.
Living in Aus, 2 years to go on my NZ passport.
Can I travel overseas (from OZ) on my NZ PP if im bankrupt ?
Can I renew my NZ PP from OZ ?
Yes you can travel from Australia to anywhere you like on an NZ passport except NZ.
Well you can go to NZ but If you want to leave NZ you need to get permission. I haven't tried it yet but I've heard its an easy form to fill out online.
@chinese bombs have you had to provide any further financial details over the life of the bankruptcy and did you pay your tax refunds towards the debt
Hi all, little update from me. The OA has asked me to make contributions of $150 per week. I've asked to make smaller contribution in the short term as I've got some other expenses that have come up. I've yet to receive a response to my smaller request however was told I need to be between $40-50 of their calculation. In a addition to this, I've requested my credit record here in Australia to double check it. I was looking at consolidating my credit card debt, $5k with my bank and got knocked back. No idea why as my capacity to make repayments is relatively high, I've had prior loans and a mortgage with no issue. It could be a credit thing or maybe the fact I confirmed I'd declared bankruptcy and on paper it's a simple no go.
I just got a letter from baycorp regarding student loan of 60k
I work full time and earn 40k per annum.
My husband oz citizen was saving money in my bank account for his first home.
I was thinking of going bankrupt in NZ.
I have no meaning of paying it back.
My husband has transferred all the money he saved back to his bank account
Not sure if I go bankrupt can they ask for the money we saved for our house, because technically it was my money as account was only under my name.
Can someone help me or point me in the right direction or give me name and phone number of someone who can help me
Absolutely nothing and nothing re any tax return. Just submit and forget. Once you've been adjudicated I think there's no desire or ability for them to case you up if you are overseas. Just set a google calendar reminder for three years plus one day. I should offer them 10 cents on the dollar just before I get discharged but I bet they'd decline the offer...
Hi all, 'this is a great thread! I have a very small business in Oz, doesn't make a lot of money but am wondering what consequences declaring bankruptcy in NZ would have?
I just want to point for those thinking of bankruptcy, it's not easy to do so as a full year bank statement is required for you and your partner as well as declaring your assets. These information is cross checked in Australia with ATO and other agencies!
My advice is reach an agreement with NZ IRD to solve it asap so it doesn't have a negative impact on you!
If you ignore Baycorp or IRD next step is NZ high court order which will easily get enforced in Australia!
So guys be careful and act quickly..
Lol that post may as well have been signed off "Kind regards, IRD".
Sift through the comments. There is no way to deal with the IRD. At this point I'm convinced ISIS would be more reasonable.
@wolverine my partner is Ozzie we have a mortgage probably best to transfer savings to his account as they really don't care to much about him. I only needed to provide 3 months of statements. They will ask where large transfers are going, so best to get it done earlier rather then later. Not sure what ol mate was on about one year of statements.
@Wolverin2 - Gathering up your full bank statement for a year is a pretty easy thing to do. So is declaring your assets. Granted, declaring bankruptcy shouldn't be taken lightly. But to those that have investigated this and want to proceed. The process from doing it in Australia and online is very easy. About two hours from memory.
If you want to reach an arrangement with the IRD then they will negotiate with the penalty charges. NOT with any interest or principle amounts. So for an outstanding amount of say 100k student loan they might wipe 10-20k (i'm guessing at most) and expect you to pay 80k by the end of the month. There is no leeway on principle or interest. It's not like a private company that would look at your ability to pay and say "Hey, 10c on the dollar is all we are likely to see from this person" It's no skin off their nose if you pay or don't.
I don't believe there has been any asset seizures in Australian Courts to date. Far too expensive to be worthwhile.
Correct me if I'm wrong, but it doesn't appear as though anyone who has filed for bankruptcy on this forum, has had an asset they were concerned about? All those who have filed, appear to have had an easy, straightforward experience because they had little or nothing to worry about. I wonder how the case may go for those with a mortgage for example?
This recent article with what I imagine a numbers pulled from thin air, makes no mention of bankruptcy applications.
Defaulting student loan borrowers living in Australia have stumped up $4.7 million since a new information-sharing agreement kicked in, the Government says.
The agreement lets the Australian tax office give Inland Revenue contact details for borrowers living in Australia.
The first exchange of information was made in November last year, when contact details for 57,000 borrowers were sent to Inland Revenue, 38,000 of whom were in default.
Inland Revenue sent a number of these to a collection agency.
Revenue Minister Judith Collins said that by May, repayments received topped $4.7m. Some borrowers paid off their debt in full, and others set up repayment plans.
Another 12,000 borrowers have voluntarily contacted Inland Revenue since the information-sharing agreement came into force.
A recent exchange of information gave Inland Revenue the contact details of another 10,000 borrowers.
You can go bankrupt while living in Auz. I filed mine in 2014 and have just come off it. I travelled to NZ every year and all you had to do was fill in a form asking for permission to come and go..its more procedure but they very rarely deny you and they don't stop u in customs if your in between applying for bankruptcy. I actually never asked for permission a few times because i forgot all about it and i never got stopped. If you are bankrupt in NZ you are not bankrupt in Auz. Creditors don't have those details they have to get your permission for that. I just don't know about if you are self employed.
I declared bankruptcy from Aus this year as I went through the same issues as all on this forum with IRD being unreasonable. I have now been told to pay the OE a significant amount or they will go through NZ courts to get access to my Australian home jointly owned with my wife (i.e. sell it from under me) which I have "apparently" just enough equity to pay off the loan. They also slugged me $4000 to get my house valued on top of the loan. I a personally surprised no one has actually turned to self harm because of the pressure they put you under. I am now looking at losing my family home in Aus from a governments unlawful interest rates. I am going to become a aus resident and ditch the kiwi passport.
People unfortunately do.
I'd lawyer up. It's extremely expensive process for the NZ govt to take. As an armchair expert I'd say they are bluffing. There are FOI reports out there stating that there have only been a handful of asset seizures. ie less than six. I suspect if you went bankrupt under 150/200k then the lawyers fees would be astronomical for the NZ Govt. Again, i'm only a armchair expert...
There is a lesson to be learnt here though. Put the house/assets in your spouses name/Family Trust before you submit your application. Your spouse could be a billionaire and they couldn't touch her. Or next time you are on overseas holiday submit from somewhere that isn't Australia or the UK. The current law isn't going to change - Not while for every person that declares bankruptcy there are 60+ starting to make payment on their loans.
I have read on other forums of the IRD sending police round to check on a client they felt may be suicidal following phone calls trying to negotiate with them. Whether this is true or not ... Same boat as you - were you given advice on the vulnerability of your home before you lodged? Is this a threat or have you since had legal advice to pay it? Surely they would take instalments? Others on this forum are making contributions.
I'll be interested to see how you get on as I'm in the same situation but haven't heard from the OE regarding my assets yet as I only declared a few days ago. I have a house in Australia that I don't believe has enough equity to pay off my loan after all expenses are accounted for. Speaking to my parents tonight about your situation and the OE wanting a 'significant' amount to stop a sale, they have offered me a small amount (less than 20% of my total student loan) and I wonder if such an amount would be enough. I hope it all works out for you.
@ASAP did you pay your yearly oz tax returns to the bankruptcy people in nz?
I had a phone call today from Baycorp on behalf of the IRD. Have been researching this bankruptcy option for awhile now. I have a student loan that is impossible to service sitting well in excess of >$150,000 and growing faster than I could ever imagine to chip away at. I will let you guys know how my bankruptcy journey goes..
Also curious to hear if anyone has any recent updates on how their situation is going with assets being chased down in here in Aus by the OA.
Any updates ?
I am a kiwi living in Aus and successfully filed for bankruptcy nearly three years ago through Kristina Andersen after much careful research and a loan of over 50K! We are renters so have had to put off home ownership. I have maintained a separate bank acc from my partner's and only own a small Toyota. So far, so good, but now my Grandma is unwell and aging and I want to come back for a few days. About to do the application to travel but the fear of alerting anyone to our situation financially does scare me! As I only have 6 months left on my bankruptcy. It's been thebest thing ever as I too was not working with 3 kiddies and no way hubby was bailing me out of the unfathomable bottomless stress pit that my 14K Student Loan ended up becoming!
Anyone have advice on this.. I have a friend and her partner who was declared bankrupt Oct last year.. none of them are aware of the bankruptcy.. how do they get on... would the 3 year before discharged apply to them even though they are unaware they are bankrupt... they were out of NZ 15 months before this happened.. any info please..
Sorry forgot to mention they live in Aussie...and bankrupted here in NZ
From what I have read they’ll have to complete a statement of affairs before the three years start.
I thought I’d repost and share my experience for those that have a jointly owned property and have declared bankruptcy. They valued the property and advised they were going after a share of the equity. They made an offer for the joint owner to pay out that share of the equity which was done through borrowing from family. They advised their fees were approx 13k for sale of the property, the equity was a little more than that.
Hi, I am also looking at declaring bankruptcy in New Zealand due to student loan. I have tried to offer repayments over the years, but the IRD have refused due to not being what they want. I have now received a formal letter in the mail which also states IRD called me to days ago and discussed the contents of the letter with me, which is a load of crap they did not call me!! What's the best way to apply for bankruptcy? I've been living in Australia for 15 years.
Declared bankruptcy. Now OA want to pursue my husbands home as they consider it matrimonial property. The property is in his name only though I am responsible for half the debt. Will they pursue it through the court?
#Stressed out - you say they advised they were going after a share of the equity - was this beyond the initial summary of your bankruptcy? i.e. upon their review of your bankruptcy claim did you contact a lawyer or simply pay what they advised they would come after?
@Wtdn speak with a lawyer.
This is why you do your due diligence before you declare. Align your ducks and only apply when you have no assets in your name. Not sure about whether they can or would go after your partners assets. You’d think they couldn’t but I’d check with a lawyer before to even contemplate replying to them. It’s a very expensive procedure for them to attempt and they might not win.
#Seymour lawyer advised it could go either way, it's a tricky, undefined area of the law.
So I'm a year in on my bankruptcy and my work wants us all to be come contractors should I ask the OA in NZ for permission to do this or should I just do it? I'm not sure what the rules are on being self employed in another country.
Lawyer advised it's a highly tricky area of the law, could go either way.
Hey guys, so i get an call from a debt company to asking for me, i dont tell them it was me and i hang up, I am i am stressing out as i think they have my home address now :(, i am worried they will take our car of us.... if i go bankruptcy in nz would that help me or not really, any help would be great!
Wtdn, they will unlikely to pursue if they are not guaranteed to win. Even in the win case it costs them over 10k. Imagine if they lose.
Remember in the end it's IRDs decision to pursue further, because IRD will have to pay court and other fees, not OA.
I just wanted to ask a question, if declaring bankruptcy in New Zealand from Australia, can this affect an application for becoming a permanent resident in Australia?
I know it is a silly question, but I wanted to know which I should do first.
So in late 2014 after reading this thread and others decided to, after much pressure from the IRD to declare bankruptcy. I got all my ducks in a row and I did this myself on their website. No need to pay a third party to initiate this. I spoke to no one and did this online.
Since that time in late 2014 I have traveled back to NZ a few times with the permission of the OA - This is done online and is easily obtainable (with a relevant reason) Apart from applying to return to NZ this experience has not affected me at all. The week after my three years were up I checked the insolvency website and my status had changed from Current to Discharged - I did not receive an email - it was all automatic. I assume that in three and a half years my name will disappear from that website completely.
Three years goes in the blink of an eye. My debt went just as fast.
With a Labour government in there could well be a change in policy. I know the shadow education minister several years ago spoke of an amnesty but i don't see that happening as the public discourse surrounding Student Loans is toxic.
Anyway, good luck to all who go through this process. For me, it's been very easy.
Thank you so much to the people who have been through bankruptcy and provided information on their experience. It is very helpful. Can anybody who has been through a decent period of their bankruptcy please advise how the income garnishing unfolded? Did OA request you to pay more if your income rose? Did you constantly update OA on your income and expenditures during your bankruptcy? Just wanting to get some indicators of what I can expect to pay. Cheers!
There is no income garnishing. You normally agreed amount. If you read previous posts it should give you a better idea.
Its always case by case and you must tell OA if you change jobs or your financial situation changes.
You do not normally stay in contact with OA once agreement been reached and you are following your obligations.
What I have not seen in this forum or others that I have found along the way is this:
In NZ you can go bankrupt with a student loan, but not in Australia.
However, when it comes to Personal Injury money in Australia it is not considered an asset (still needs to be declared or it will be taken under fraud) so it cannot be touched whereas in NZ it is kind of under a "grey area".
Under Section 123 of the NZ Accident Compensation Act 2001 compensation is not considered an asset, so in other words, it is not a viable property. However, that is under ACC and no other NZ law seems to delve into it as a topic that I can find, so it is hard to determine if this applies to all or just those living in NZ. ACC is something pertaining to NZers, however,
An New Zealand lawyer or two I contacted did mention that personal injury money is not an asset unless it is something claimed under something like a contractual agreement or something like pain and suffering. No clarity was given as to whether or not this extended to NZers outside of NZ although that was brought up.
Thus the "grey area".
What it will come down to at the end of the day is the Appointed Trustee and how s/he assesses the claim.
I feel that if NZ laws are going to be applied then Section 123 should be made available to everyone whether in NZ or abroad up to a certain threshold that is in line with NZ ACC payouts. It is only fair and that way is not discriminative.
Appointed Trustee should be Official Assignee.
Since I wrote what I did above this is what I found it:
1) A scheme started recently in April 2018 with pro bono (trial I think) lawyers assisting those filing for bankruptcy with no legal representation when it comes to being in court. I believe it is to simplify the process as much as possible and especially when it comes to legal jargon for the low man.
It is likely case by case and there would be a criteria that has to be met to qualify.
Am not sure if this extends to those NZers in Australia, but if contacted they might be able to direct you elsewhere for help if your bankruptcy is not so straightforward and it has to go higher.
2) The Insolvency knows that ACC only covers NZers in NZ when it comes to personal injury compensation, so they will not tell you about it and will claim it as a viable property once you file.
It probably pays to have no money because it does have to be declared by law.
One thing that can be done is this - under "6b" (application) make it very clear what is needed as an expense beyond the basic allowance of $1,200, only it has to be viewed as a "necessity". E.g. Medical Equipment.
NOTE: Legit claims as well, so make sure you are doing it for the right reasons and situations that do apply.
It will come down to the Official Assignee's decision on it after you lodge a "Section 123" form. (This form may have to be requested).
Just so you know, it can be reviewed or appealed if it is rejected, and/or a complaint can be emailed through to the Regional Manager.
Please give me an idea of income that you can earn without making payments?
My business went into liquidation in 2011 and I moved to Australia in 2012. I was made bankrupt later in 2012 and it made no difference to my life in Australia. The AO asked for my financials etc from Australia and I didn’t hand them in. I traveled freely between the 2 countries regularly and never got questioned once.
Once you enter into Bankruptcy and are overseas I'd say there is a 99% chance that there will be no cross country investigation into your Australian bank accounts. It's just a date that triggers an automated process in three years time. The NZ OA is not going to apply to an Australian court to access Joe Bloggs. Anyway it's easier to ask for forgiveness than beg for permission
Has anybody that has gone through bankruptcy got a loan in Australia while still bankrupt in NZ? Did the OA find out? I understand to stay away from banks like Commonwealth and ANZ.
Yep I got a secure car loan no problems just after the 1 year mark.
Lawyer advised OA may consider the cost of pursuing NZers in OZ through the courts as won’t want to potentially set a precedent of letting debtors get away without paying a cent. Has anyone made repayments following bankruptcy or negotiated with OA?
Hi - yes, I was told to pay a monthly instalment which, had I agreed to, would have been larger than the Student Loan minimum. I went back with about 1/10th of what they were asking, and it was approved.
Thank you re:conflicted. May I ask how long the process took? ie, once you made the offer? It’s been months and months, I can only assume they’re looking into processing the courts or unorganised??
It was maybe a week? I went via Kristina so she did all the heavy lifting!
Hi was anyone living in australia able to buy a house easily and get a mortgage after being released from bankruptcy?
Hi All, I personally filed for NZ bankruptcy from Australia in 2013.
It got to the point if I returned to NZ to see family I would likely not be able to leave due to my student loan debt that was out of control and climbing by the day due to interest and penalties.
After seeking some advice from a lawyer and my accountant I made the bankruptcy application online, 5 working day I was asked to provide a statement of affairs, basically this is everything about your financials and assets. Bank statements. After providing everything requested to the trustee via email around 25 days later I was declared bankrupt in NZ.
160K NZ student loan debt gone, I was issued with a new IRD number, I had no other debt in NZ but had to declare all debts including Australia but these weren't affected.
Being bankrupt in NZ had little to no impact in Australia, It's mainly the shame and stress but once it's done you can turn a page and get on with life.
These were my concerns and how it worked out for me.
1. While you are not meant to run a business while bankrupt, NZ has no control of this outside of NZ according to my lawyer. However the trustee can extend your bankruptcy if you don't comply so as to follow the law my wife become the sole director of the company and I applied to work for a relative while bankrupt. This was approved by the NZ trustee.
2. Under the bankruptcy you are not to travel unless you get permission from the trustee. I needed to attend a family members wedding which was accepted by the trustee and I was able to return to Australia.
3. It had no effect on my credit in Australia. However you should comply with any borrowing limitations. All current Australia debt and loans weren't affect, nor my credit rating.
My advice if you in a similar situation.
1. Get advice. Talk to a lawyer and accountant if you're self employed. Don't get advice from debt collectors, creditors or trustee's, basically anyone linked to the debt is not going to provide good advice.
Unless you have assets there's no money for them if you go bankrupt so they will tell you all sorts of lies or try and convince you to another arrangements.
Also friends and family can also be very judgemental so only tell them if you need or want too.
Get advice from a lawyer you engage. In fact the lawyer I spoke too who gave me written advice didn't even charge me for his time. Yes theirs still people with a soul in the world.
2. Don't delay or think the debt will just go away, it wont and will cause you a lot more stress and feelings of shame or worse you will be dragged through the courts and bankrupted. This is my biggest regret, I wish I had done it sooner as would have saved me so much stress and worry. I was depressed, it nearly destroyed my relationship.
Trust me either pay the debt, come to an arrangement with the creditor or apply for bankruptcy. The sooner you sort it out you can turn the page and move on with your life.
Debts can follow you for life so deal with them. Bankruptcy is only for 3 years as long as you comply with the law and the trustees demands.
3. Be honest and upfront with the trustee, I found that the trustee granted reasonable requests as mentioned above.
I hope this is helpful and provides some light at the end of the dark tunnel of debt.
Hi all, today I was officially discharged from my bankruptcy, YAY! The process at the beginning was somewhat stressful as I had a house here in Australia. I was required to get a valuation on the house so the OA could determine whether it was worth selling in order to recover some of my debt. Fortunately the valuation proved it wasn't worth their while however knowing that potentially I would lose my home was not something I would wish on anyone. Since then however I have just been paying my agreed amount and had that ticking away in the background. All going well my husband and I will be buying another house in early 2019 so I'll have everything crossed that my bankruptcy won't affect that. Our mortgage broker is confident it won't, however time will tell. As Sue Ham has asked, I'd like to know if anyone has bought a house once they were discharged.
Hi everyone, just going into bankruptcy now, as this seemed my only option. I am married and have three children. My husband and I have joined accounts and no assets. I am a stay at home mum as my husband works away all the time. Just wondering if anyone has done this recently and what is your personal (day to day) experience? Is there anything I should be particularly aware/cautious of? Would really appreciate any advice or to hear your experience going through the bankruptcy while living in Australia.
If you get a court order to go to court for debt of any kind and you do not show up a warrant can be issued and then you can be stopped at border or when applying for residence or citizenship somewhere else it can prevent your application from going further. This is when civil matters becomes criminal. So if you get a court order for a hearing for debt, the best thing you can do is write the courts back and tell them why you cannot make it and that you do not consent to attend the hearing. You can also state that you are in the process of filing bankruptcy and you therefore believe it is not favourable to the collecters or yourself to proceed eity the hearing and the bankruptcy will be in place soon. Also state if you are under financial hardship and unable to attend the hearing because of this - next to your other points. Remember that you do not consent to attend the hearing. This is very important as you must consent for the hearing to be valid. If you run and not show up with give no response then they will see that as a sign of guilty due to avoiding and the courts will issue a warrant to your name. If you show up to court you consent unless you showup and hand the referee or judge a letter that you do not consent to these proceedings and wish to remove yourself from them and state the bankruptcy filling and being in process if this is true. Do not be afraid of the courts as they are only there to collect money. Stand up for yourself and the money you do not have to give them and be sure you reserve all your rights and write that and that you do not consent and briefly state your points. They cannot issue you are warrant if this happens in time. Also if you look at the NZ Bill of Rights they cannot detain you for payments you cannot pay when crossing the border but they fool everyone that they can do this as Key has misled people to believe it, even the customs agents. Point at the Bill and quote it. If you write the courts and do not consent TO GO TO COURT and state your points of financial hardship and include if you are filing bankruptcy or not then NO WARRANT CAN BE ISSUED!
I have recently gone BR in AU for debts in NZ, do I have to get permission to fly back to NZ at any time? if I don't get permission is the OA likely to know that I have been in & out of NZ?
After you have been discharged from Bankruptcy. How long do you have to continue to submit a yearly IR3?
Why should the NZ tax department have knowledge of my income after the three year period. When that income is garnered in a seperate country. Do those who have been through the three year process have any idea?
Once my bankruptcy was up I was hoping to have nothing to do with this department.
Has anyone declared bankruptcy more recently? Has anything changed from what I read in this blog?
Thank you :)
Loads of posts detailing the ease of the process. I've been in and out with no ramifications whatsoever. (Out in the last year) If you have a lot of Australian assets then do your due diligence. If you don't any and you are wanting to after researching the pros and cons then just_do_it!
Hey CB1, I went back recently. I contacted the OA and stated I needed to be back for family event but had to leave NZ for work purposes. Gave me permission without any hassles.
I have been through the same ordeal and what helped me was information. Get a lawyer if you are unsure, the OA will not be a good source of info (I asked something and didn't get a reply) and don't volunteer info that will not help you. If you have assets in Australia, then you need to consider things very carefully as NZ and Australia have similar laws and it is easier to enforce bankruptcy in Australia if they really want to. But it all depends on the amount of debt you have and the equity of your home. I don't wish for anyone to go through the stress, so please get some help from a knowledgeable person like a lawyer. If you are from another country apart from Aus, then it will be harder because the laws in other countries are different.
Hi I am a married mother and I am initiating the bankruptcy process for a student loan of $85,000. Has anyone done this process whilst married? What happened to money in your accounts if they were joint accounts? We’re they interested in assets that were in your spouses name only? (Like a car?) any advice gratefully recurved. The process is quite daunting - I don’t want to ruin our children’s future because I moved overseas with a student loan. I feel like a criminal & a failure.
Hi guys, there are lots of amazing posts here in this thread, many of which helped me make the decision to declare bankrupt myself just under a year ago.
Like many here, I had a student loan in NZ and after moving to Australia found it grew to an overwhelming size. I'll try and keep this relatively short and to the point but wanted to highlight my experiences.
1. Go through Kristina like many have already suggested. I did this myself last September and found the process to be incredibly fast and efficient. Kristina was a wealth of information and very helpful.
2. I'm married with a child but own no major assets. The OA isn't interested in my wifes assets of bank accounts, only those that have my name on them. The OA wont look at or touch your partners assets if they are not financially connected to you.
3. Be honest with the OA. In my experience they're not horrible people and as long as you're honest with them you will find the process very straight forward and relatively stress free.
4. The $1000 that many are worried about is generally referring to savings, rather than day to day finances. It pretty much means you can't "save" while undischarged. As with everything else if you are going to have balances over this amount just explain to the OA why this is. If there is a relevant reason, they'll be ok with it.
5. Your Australian credit rating isn't impacted. A few months ago my wife and I took out a personal loan here in Australia and the bank did not care that I was undischarged in NZ. I told them when doing the application as i was legally required to do and they told me it had zero impact on the application.
6. If you're looking at taking out home loans after being undischarged some banks may look negatively on your history, but there are a lot of lenders who will, much like my bank with the personal loan, not care about it. Your credit history in Australia is far more important than your financial history in NZ.
7. If you're going to declare bankrupt and you do have assets, plan it carefully and transfer as much as you can into your partners name. My lawyer told me that if you do this and the asset is a large value item, wait 3 months before applying for bankruptcy.
8. If you do go ahead with bankruptcy, be prepared to accept that until you are discharged you are answerable at all times to the OA. Any changes to your income, status, address etc need to be updated with the OA.
In summary, I was declared bankrupt last October (2018) so am nearly a year in. I've spoken to the OA maybe 3 times during that period. It's the best decision i've made in a long time.
Yes @Relieved Bankrupt it's the best decision I made and I did it 4/5 years ago and faced zero repercussions. One thing I'd add is that you don't need to use Kristina or any other third party to initiate this for you. I did it myself and it was quite straight forward.
@Debt Burdened your spouse is in no way responsible for your debt. List all the assets as theirs and you'll be fine. Hell, you can submit a bankruptcy without them knowing and there be none the wiser. You deal with the IRD all via email.
Thank you relieved bankrupt for sharing your experience. I was declared bankrupt on Friday and I feel a mixture of peace, relief & surprise for how smooth the process was (applying for hardship for my student loan was more complicated)
I also used Kristina and she was great.
I have to talk to the OA on Monday so there are a few unknowns still but I do feel happy that I’m not accumulating ridiculous interest with no hope in sight of paying off my student loan. Thank you everyone for sharing your experiences.
I also have gone through the bankruptcy process due to an out of control student loan.
The hardest part is the worry/anguish leading up to it. I did not have any outside assistance in doing it and its all quite straightfoward. After submitting the application I had one (maybee two) calls from the official assignee to clarify a few administrative points. I suggest that you make sure you read and understand the documentation that you are signing. If you do have assets, you need may need to look at getting rid of them AND making sure that you are past the time threshold stated in the form to be able to fill in the form without committing fraud. One option to look at is to enter a negotaition with the IRD for hardship to buy time/stall the process while you clock up the necessary time since disposing of an asset to be in the clear. Can also use this time to set up a financial history separate from any partners. That was my approach. Maybe it was not necessary, who will know
Hi I am living in Australia & I went bankrupt due to a student loan in NZ. I made large repayments to my student loan ($680 per month) for three years then a surprise pregnancy meant I couldn’t afford the repayments so I applied for hardship. My student loan ended up as big as it was if I hadn’t made the repayments... my advice is that even if you can afford the repayments now you don’t know what the future holds so make some financial decisions now so you have the option of bankruptcy if necessary. If you are a serious couple consider putting savings & mortgage into your partners name only. Some would say moving money knowing you may go bankrupt is fraudulent; I would argue that the penalties and interest charged to overseas student loans is fraudulent. The process of applying for bankruptcy is very easy. Some paperwork and it is complete. Be aware that in America legislation meant that bankruptcy did not wipe student loans and this may happen in NZ. I am glad my student loan is wiped and I can move forward with my life and my baby.
I have not thought about my SL for too long. After reading this thread I've contacted Kristina.
I'm too old and too poor to ever pay my debt back, I feel sad about that. Many won't believe me.
So, now I need to do my due diligence, it's very-very scary. We don't have much and Australia is getting more expensive by the day!
It's very late, I know that this is my first step. I should have done this so long ago. I successfully ignored this and have not been back to NZ for a very very long time.
Thank you to everyone for sharing, I'm truly quite frightened for my families security.
I never expected how tough it would be to try and deal with this mess. It's time.
I'll contact a lawyer as well. I think that's very sound advice.
Thank you to all.
Good luck 21-again! It is sad it comes to bankruptcy when dealing with IRD and student loans but it is so worth it to get them off your back. The bankruptcy does not effect you much in another country. You need permission to leave NZ but can travel to other countries no problem. You can still go to NZ during your three years bankruptcy but you need permission to leave NZ - not too difficult. If you have any assets get them in your spouse or partners name only. Joint assets will be considered 50/50 owned. Once bankrupt the OA may demand a big payment but this can be negotiated down. It’s very expensive for them to take you to court so negotiate 10-20% of their initial demand and you should be ok. If you have nothing then there’s nothing for them to demand. They only asked me for three months of statements so I would get organised and get applying as it is such a relief to not have IRD demanding ridiculous amounts. Good luck and don’t be too hard on yourself. None of us wanted this but we were left with no option when the government legislated exorbitant interest. I wish you all the best and you will be so relieved when it is done!! Be humble and honest with the OA. They are really nice to work with and nothing like IRD.
Can/does anyone here recommend an Australian based lawyer that covers NZ Student loans, and the IRD please?
They are very aggressive the IRD and their using Australian based NZ team which may be contracted to IRD not direct I'm concerned that they may be incentivised by maximum return rather than negotiating a reasonable closure to the debt. Figu3s I have are at over 500% jump in costs.
This is highly unethical and predatory at best.
Be good to know how others have dealt with this outside of the bankruptcy option espoused in this thread.
Need this to ensure I've covered
all of my bases.
I was declared bankrupt in NZ in 2015 and was discharged last year. Best thing I ever did. I had a small, manageble student loan that suddenly became large and unmanagable when I movef overseas. Bankruptcy hasn't affected my Australian credit rating however the OA did write to all the organisations in Australia that I had loans with and this did impact me. For example, my bank's knee jerk reaction was to freeze my accounts. I had to explain to them that bankrupt in NZ dies not mean bankrupt in Australia. More recently, even though I am now discharged, my car finance company demanded full payment of the remaining loan immediately because the car was written off in an accident so the loan was no longer secured. I had to explain to them that bankrupt in NZ dies not mean bankrupt in Australia. Both times it was easy to sort out but very stressful to begin with. Anyway, thought I would let you all know so you can prepare yourselves to deal with any Australian finance companies that the OA writes to "as a courtesy" to let them know you are bankrupt in NZ.
I, like many others in this forum, took out a student loan in the 90s that turned into a monster $73,000 after 15+ years of living overseas.
Now older and somewhat wiser, living in North America, I opted for bankruptcy as I want to get my finances in order.
I contacted Kristina for advice initially and the process has been very smooth so far. Fast responses and no nonsense.
The OA did email me to ask for some clarifications and 6 months of bank statements, which I sent, and a few days after that I received an email that my bankruptcy was approved.
I'm still waiting to hear back from the OA about any payments I'll have to make and they want to know about income/employment changes and travel. There were no stipulations in my case about limits on saving - only on accessing credit. Reading these forums has been very reassuring and makes me feel less alone in this situation. I'll try to remember to update in a few months for others who are reading.
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