My name is Richard McCulloch. I look after the National
Processing Center in Christchurch for
the Insolvency Service. And so hence the reason
why I have a little bit to do with a lot of
you budget advisers. I guess it’s quite
appropriate in some ways that we’re sort of
little later in the day, coming and talking to you,
because when people are getting into financial
difficulties, it’s probably a little bit later
in the day when they’re coming to talk to us. And sadly, that’s
where things are. I guess New Zealand’s
insolvency laws are very similar to [INAUDIBLE]
right across the world. But fortunately, over
history we no longer execute people who haven’t
paid their debts. Hey, we very seldom
would throw anybody in prison for just that. That really wouldn’t happen. So our laws today
are very much built around the basis of giving
some finality to the creditors when they’re frustrated with
not being able to be paid. It gives that finality to the
situation and [INAUDIBLE]. But more importantly, it
gives the data fresh start. So it’s about relieving them
from the pressures of all the debts that they’ve got
mounted up around them, and they can get a fresh
start into a new world. The insolvency laws,
as a general thing, very much focused on freezing
the debts that people have got [INAUDIBLE] today. And also alongside that
because nothing comes free, comes alongside that is
freezing their assets. And depending on what options
are available to that person, and we’ll go through
those in a minute, but we would then maybe
look to sell those assets or whatever it is, and try
and get as much money back to the creditors as we can,
still enabling the debtor to continue a fresh life. So that’s sort of the goal
that we’re looking for. Unfortunately today,
I really haven’t got the time to go through
infinite detail of the options. And so what I thought we’d
do was sort of cover off, what are the options that
are available to people? And what are the implications
and where is it going to? So obviously the first
option that’s on the board there is a summary and stormed
order, which is basically a debt repayment plan. The big thing about
debt repayment plan is the person needs to
have a look at their budget and say, well
actually, if I didn’t have to pay all
these other debts, how much money have I got
left that I could contribute to all of my debts to get it? So effectively it’s a little
bit of a sort of credulous pull type view. And we’re seeing a lot
of uptake in this area, a lot of people are
showing an interest in it. Again, like other ones, it
freezes the debt as it today, so the creditors can’t put
any more penalties or things on from that point onward,
so it freezes the debt. But it does only
include unsecured debt. So if they’ve got property
or something like that, they could lose that
to the creditor. But a very good option
for a lot of people who have got themselves
into quite a lot of debt, they’re making a lot of payments
across a number of people, and it’s about
bringing it together into a debt repayment plan. The limit is $47,000 up there. So if their debt’s under
$47,000 and they’ve got some money available,
then go into a summary and installment order system. If their debt’s under
$47,000 but they’ve still got nothing left
in their budget, even after they stop paying
these bills, whatever they’ve got, there’s still nothing
left in the budget. And their really only option
is the no asset procedure. Again, no asset procedure,
it’s a one-off opportunity. They get one chance to actually
get themselves sorted out. They are released
from their debts. Because there’s nothing in
the estate that can be sold, so they’ve got no property or
anything that we can realize, the creditors aren’t going
to get any money out of it. They’ve got no money
to make contributions. The creditor’s not
going to get anything. So the creditors have to
release them from their debts, and so obviously
creditors aren’t a big fan of the no asset procedure. But it gives the debtor a fresh
start, and that’s the goal. So we wouldn’t normally take
household equipment, household furnishings, things
like that, unless it was some sort of massive
value jewelry or art or some quite high
value thing that we figured was actually
not really necessary in their general living. But we won’t only take
furniture and equipment. Similarly, tools
of trade, people who are in business
business or tradesmen, they’ve got a degree
of tools of trade. We took them away from them,
but how would they work? And also most of the time, those
assets aren’t worth selling. We’re trying to give
them an opportunity to carry on life
with a fresh start. But they’re not
necessarily going to be extravagant, if they’ve
got some extravagance in there. Once they get over the
$47,000 magic figure, their really only
option is bankruptcy. And so in that scenario,
anything that they own [INAUDIBLE] with
the exception of, we’re not going to deal
with household furnishings and things like that. But if they’ve got other
assets that could be sold and [INAUDIBLE]
to the creditors, that’s where
bankruptcy comes in. And so it basically
freezes all of that stuff. We would sell it. They get the opportunity
to carry on a fresh start and the creditors get paid
for whatever we can get. As I said before, nothing
comes free in terms of there are some implications for
people making this decision. It’s a reason why they probably
should quite lighten the pace. They’ve tried a number
of things to try to get around this before
they come to see us. But effectively, the
restrictions on them are about stopping them
getting back into debt again. So a person who’s in a
summary installment order or in a no asset procedure,
they’ve got a restriction. The no asset procedure
is 12 months, so they cannot borrow any more
money for a period of 12 months without telling the person
they’re borrowing the money from that they’re
in that procedure. Summary installment
order, they have to tell them all the time
they’re in the order, generally three years. And a bankruptcy, the same. If they’re in there
for three years, they have to tell somebody. But also, end of
bankruptcy, we won’t let them go back into
business or work for relatives under the guise of
managing businesses, all those sort of things,
without getting some consent. We won’t even let
them leave the country without getting consent. So there are some
constraints on them. But they’re not
insurmountable and they do give you a free start. I can’t really go over all
of the detail here today. So the website, this is
the insolvency website. At the top there, I register
in the [INAUDIBLE] register. If you want to find somebody
who’s in bankruptcy, click on those buttons and
do a search on the name. That’ll get you to them. The other information
down on the bottom, carries all sorts of
information in there. And if there’s something you
can’t find, Contact Center. There’s a contact us
somewhere that you can do. Contact Center has got a
really, really good reputation for giving really good advice. So contact the Contact Center. There’s email contacts
and we go from there. The other thing about the
website is on the top corner up there, it’s got login
and it’s got do it online. You can do anything from an
insolvency perspective online these days, just about. So go and have a
wee play with that.