Insolvency – DRO, NAP and Bankruptcy
Sometimes the only way to resolve a client’s debt is via insolvency – but they are options of last resort.
Legislation provides clients with ways in which to obtain protection from creditors. Three of these are:
- Debt Repayment Order
- No Asset Procedure (NAP)
- Bankruptcy.
Once one of the above orders are enacted then:
- interest on debts is frozen while repayment occurs
- creditors cannot take any further action against the debtor.
The order is a protection from creditors unlike a domestic protection order that arises from family harm.
The criteria are often changing, and it pays to ensure you are aware of the latest criteria and details. The Insolvency Office provides an excellent website detailing information about each option and online forms to apply for one of the orders.
https://www.insolvency.govt.nz/
We do not do insolvency procedures; these are managed by the insolvency office, but we may need to help our client prepare and collect the necessary paperwork. Debtfix is a not-for-profit organisation that provides a free advisory service to financial mentors to support clients and prepare paperwork. They provide debt management advice and solutions for people with varying levels of consumer and/or business debt, and who feel they have no way out.
