Five Things That Must Change With Bankruptcy Law In Aotearoa – Scoop.co.nz

Posted: October 11, 2021 at 10:08 am

Monday, 11 October 2021, 9:59 amPress Release: Debtfix

During 2021, Debtfix co-founderChristine Liggins has been on a mission to bring aboutchanges to bankruptcy and the Insolvency Act inAotearoa.

The number of New Zealanders applying forbankruptcy is slowly decreasing but in the 2020-21 yearthere were 784 adjudications.

Thats a lot ofindividuals, families, partners and creditors who arefinancially and emotionally affected bybankruptcy.

Liggins wants the following actions madeto improve the outcomes for people with debt problems andthe organisations they owe money to.

Currently, there are about1600 bankruptcies that are still active, well beyond thethree-year term. These need to be resolved and removed sopeople can move on with their lives.

Applying for bankruptcy is a legal optionfor managing problem debt, within the Insolvency Act.Therefore, the process should not be dealt with in the HighCourt, as if the person is a criminal. Bankruptcy is notfraud.

Currently, an application forbankruptcy is administrated, not reviewed. An applicant cango online in a moment of desperation, apply for bankruptcy,and find themselves locked into the system without anyreview process. They may not know the impact bankruptcy willhave on their life, nor alternatives that may be better forthem and those they owe money to.

Currently, a person can be madebankrupt by a creditor for as little as $1000. Bankruptcy issuch a serious action that the amount should besignificantly higher. There are cases when angry familymembers, ex-partners and businesses use bankruptcy as an actof vengeance.

Paperwork, not signing on the dottedline and avoiding the problem hoping it will go away, canall lead to people enduring bankruptcy proceedings for manyyears. New Zealanders need better systems to ensure that thebankruptcy starts on time and is not delayed for months, oreven years due to a lack of Statement ofAffairs.

Bankruptcy usually lasts forthree years from the date that you supplied a completedStatement of Affairs, unless an objection to your dischargehas been lodged in which case you will be informedseparately. New ZealandInsolvency and Trustee Service

Debtfix wants societyto change the stigma attached with bankruptcy.

Peoplemake mistakes, have relationship breakdowns, unexpectedhealth problems or suddenly lose their job through no faultof their own, and they can find themselves unable to meettheir debt obligations.

When bankruptcy is the onlyoption, it is not the same as fraud and it is not a criminalact.

Fraudulent people should be dealt with within thecriminal system and people who need to use bankruptcy shouldbe supported to resolve their debt, learn, and moveon.

Scoop Media

Become a member Find out more

Read the original post:

Five Things That Must Change With Bankruptcy Law In Aotearoa - Scoop.co.nz

Related Post