Writing Off Debt

[keleri]

Several weeks ago there was news item from government that they are introducing a procedure to take before you need to go to bankrupt. As I can remember if you owed less than $46000 and have no major assets you can apply to have the dept written off and only are restricted in your financial dealings for one year. All this a bit vague but relying on memory. Does this mean that any tenant can walk out owing money and can easily wipe out the dept.

[roseneath_rat]

Do you mean the 'No Asset Procedure' ?

Have a look at this:

http://www.insolvency.govt.nz/cms/personal-insolvency/what-is-the-no-asset-procedure

What is the No Asset Procedure (NAP)?

A debtor who is unable to pay their debts may have an alternative to bankruptcy through the No Asset Procedure (NAP). Unlike bankruptcy, the NAP lasts one (1) year. Creditors cannot pursue you for debts included in the NAP.


Applying for the No Asset Procedure

Applications are made to the Official Assignee, either electronically or manually. An application and Statement of Affairs must be completed to a standard acceptable to the Official Assignee.

To qualify for entry you must:

* have no realisable assets (realisable assets exclude cash up to $NZ1,000, a motor vehicle up to $NZ5,000, tools of trade, and personal and household effects)
* not previously been admitted to the no asset procedure
* not previously been adjudicated bankrupt
* have total debts (excluding student loan) not less than $NZ1,000 and not more than $NZ40,000. (Please note that your debt level when applying for entry to the No Asset Procedure will be calculated including all unsecured and secured debt)
* complete a means test showing you have no means of repaying any amount towards your debts.

The Official Assignee can refuse entry into the NAP if:
* your creditor(s) object to entry or
* bankruptcy proceedings have been initiated and the likely outcome for the creditor would be materially better if the proceeding continued or
* you have concealed assets or
* you have committed an act that would be an offence under the Insolvency Act 2006 were you bankrupt or
* you have incurred debts knowing you had no means to pay them.

[srv]

Honestly who makes up these laws... Good thing there is an election this year!

Lets just hope most are to stupid to apply.

[cube]

They may be, but there are others in the advocacy industry that will not be, and will push them in that direction, rather than taking responsibility for their actions.

[Perry]

Wouldn't it be nice to add the NAP to the
schedule of benefits? I.e. the government
(aka as the nation's constituent taxpayers)
will pay off your debt for you.

[srv]

I wonder if they write off your student loan as well?

As would be great if you just finished studying... go borrow 40k do your OE, come back get it all written off, go on the benefit for a year & presto back in business.

[drelly]

The RTA already has some bias against the landlord when it comes to personal crises the tenant has. I have an awkward situation at the moment where a tenant is leaving the country because her sister is returning to the UK for cancer treatment. Tenancy is fixed term until 25/09/08 but although she hasn't left the country, she moved out of the house a few weeks ago. We have both tried to get a new tenant but with no luck. Rent dried up two weeks ago and now she refuses to pay rent or return the keys until I sign the bond over to her and terminate the tenancy. Not much I can do now as she flies out on 26/08/08. I'll have to treat the house as an abandoned tenancy, apply to the tribunal for release of the bond and an order for arrears and expenses. The tribunal may order a reduction in her fixed term tenancy but due to lack of options for me, at this point, I have nothing more to lose.

[srv]

The RTA already has some bias against the landlord when it comes to personal crises the tenant has. I have an awkward situation at the moment where a tenant is leaving the country because her sister is returning to the UK for cancer treatment. Tenancy is fixed term until 25/09/08 but although she hasn't left the country, she moved out of the house a few weeks ago. We have both tried to get a new tenant but with no luck. Rent dried up two weeks ago and now she refuses to pay rent or return the keys until I sign the bond over to her and terminate the tenancy. Not much I can do now as she flies out on 26/08/08. I'll have to treat the house as an abandoned tenancy, apply to the tribunal for release of the bond and an order for arrears and expenses. The tribunal may order a reduction in her fixed term tenancy but due to lack of options for me, at this point, I have nothing more to lose.

I bet no one has cancer... I bet she probably isn't even leaving the country lol... She has prob moved in with her new partner or something like that. The amount of lies & sob stories people harp on about.

We had this one guy recently seemed like a cool dude got on well with him, then he started going on about how he had been broken into. So we went around & changed the locks for him etc. (as could see any forced entry so thought maybe the previous tenants were up to no good)

Anyway a few weeks later get a text saying he had been broken into an additional two more times & that he was sick of it and he has moved out. So around we go, still no signs of forced entry again... So went and had a chat to the neighbors to see if they knew anything... The real story was his girl friend has found out he had been cheating on her and had gone mental, smashed up his car etc so he had decided to move into his new girls house lol.

[Perry]

Dave - what a bum rap. Can you lodge the TT
application now, rather than wait, asking for
urgency, perhaps? Seems like a locks change
is on the cards, too. More expense. Bah!

[Perry]

The Craziness Continues

I wonder if they write off your student loan as well?

As would be great if you just finished studying...
go borrow 40k do your OE, come back get it all
written off, go on the benefit for a year & presto
back in business.

Perhaps the W'gton Comrade Commissariat could
use that as a bribe to get student votes? I.e.

Not only have we dropped the interest charge,
we now make it possible for you to get your
loan written off! Vote for us!

[drelly]

Hey Perry,

I would consider a mediation but I requested an urgent one a few weeks ago and it took 3 weeks to get a date! The trouble with lodging a TT application before the end of the fixed term is that they will just terminate the tenancy at that time. Since I have no tenant ready to move in, there's no point in doing this. I may as well keep looking for a tenant and lodge an application as soon as I find one, or if none is found, lodge after the end of the fixed term and and claim for all the missed rent.

[Perry]

Right - but we all now what the chances are
of getting paid, despite the TT Order. Worse,
if the *_*_*_* has indeed gone overseas, the
already slender chances will then be what?

[drelly]

Oh true... but I have nothing more to lose and a monitor on Veda Advantage will possibly pick her up later on as she's intending to return.

[keleri]

To repeat

The question was, can and will tenants use this procedure to not pay their debt. It would seem to me that this will be an easy way as many tenants would fall into the category of no assets / money so when the word gets out even if you track down the tenant you are not going to get your money anyway. We will all have to toughen up and not get in the position of being owed rent.

[Perry]

We will all have to toughen up and not get in the position of being owed rent.

TT willing, of course. Wonder if the RTA Amendment Bill
will promote such a course of action? BTW - anyone
have any idea what the blues think of the NAP idea?