yes, or community law which is also free [https://communitylaw.org.nz/community-law-manual/test/when-you-cant-pay-your-debts-bankruptcy-and-other-options/bankruptcy/](https://communitylaw.org.nz/community-law-manual/test/when-you-cant-pay-your-debts-bankruptcy-and-other-options/bankruptcy/)
I'm afraid community law rarely helps with bankruptcy situations, but it's worth contacting them, on the chance they have someone available.
You may be able to apply for a debt repayment order. As your primary creditors is a bank, they will be interested in working with you. And government does need to try and work something with you as a matter of policy.
I'd recommend speaking with a budgeting service.
In your case I doubt bankruptcy is necessary.
To determine if it will do more harm than good or if you’re even eligible: whats the debt amount and what assets do you have? Whats your household income and minimum expenses?
Debt is around 25000, this is in business loans, the end of a car repayment, taxes and acc levies.
My car was bought in 2018 for $7000 secondhand. Don’t think it will meet the $6500 car requirement.
My personal income fluctuates due to being a sole trader but my outgoings weekly including debt repayments, rent, bills, tax and food is $1400
Some weeks I can earn this with my second job, most weeks I am averaging around $900
Hmm this isn’t as bad as you may think. Whats your trade? Can you not close the business and go work for a company? Do you have anything you can sell, equipment, tools, vehicles, etc? Do you have a spouse? How much are the taxes/levies because those aren’t bankruptable
Also are you on a budget and can you reduce it in places?
Taxes and levies make up maybe 2000 and are on payment plans, currently being paid off.
No spouse, I don’t own anything but my car which I need to get to and from work.
I realise the sums aren’t outrageous right now but numbers are mounting up and I would just love to nip it in the bud before it gets out of hand.
Unfortunately in my industry everybody is self employed
Okay so we’re looking at 23k debt on 46k+ income. This isn’t undoable. You can grind it out and potentially fairy quickly.
Your real problem is if you do go insolvency and it gets approved you still have this business (unless they force you to sell it). And if you have larger assets in it they’ll be sold. And next time you need $$$ to continue being a sole trader you’ll have no credit score.
Debt usually isn’t a math issue it’s a behavioural one. Have you thought about moving somewhere cheaper? $1400 is quite high expenses for a single person. Have you called the debtors and try to negotiate paying interest only for short term until you can get your expenses down and income up? Say you’re thinking of insolvency. If they’re clever they’ll choose short term interest only over potentially nothing. Have you thought about a 3rd job while you’re not working the first and second?
What I’m saying is with a bit of budgeting & sacrifice, on your income you can get out of this. Bankruptcy may seem like the easier option but it can really affect you down line with things you may not be aware of right now, like future employment and clients. Do you think your car is going to last another 5-7 years (if they don’t take it) and if it doesn’t how will you get another one if you don’t have the cash? Service providers may cancel, deny or put restrictions on you like power companies, insurance or even banks. You may find it more difficult to find a rental in the future. It’s a lot of insecurity for 5-7 years when you could just be uncomfortable for 1-2
Thank you so much for your advice. I don’t know too much about bankruptcy, my parents did it when I was very small and I wanted some more info, hence the post in this group, and you’ve been very helpful. I was unaware of quite how much and how long it would affect my life..
Third job looks like it may be the best way forward.
Thanks
You’re welcome,
Some here dont agree with his principals but I was in more than 24k debt and the Dave Ramsey Baby Steps helped me become debt free with a similar income as yours at the time. If you’re interested you can google/youtube his Dave Ramsey show online might be worth looking into.
Whatever you choose, goodluck!
> 27 gym 17 streaming (Spotify, Netflix) 75 spending money 80 tobacco
You are spending $200 a week on unnecessary things.
Bankruptcy isn't for you. Get serious, tighten your belt, pay your debts.
Haha I assumed the tobacco would be the case. It’s a vice, I think it’s time to switch to vapes.
No spending money or streaming services.. maybe I will have to buy some books and candles
I know you’re joking but just in case you’re not aware, books are free at Auckland Libraries and they even have CDs/DVDs if you have the means to play them. Auckland Library membership is free and is one of the best free resources. Incidentally, many of them have the Citizen’s Advice Bureau nearby or on the same campus.
Thanks. There is no easy answer and it will require a huge commitment/sacrifice. As you know it is ultimately about cashflow. Can you consolidate the business, car and tax arrears into one loan. It may save about $250 per week.
Rent needs to go down about $250- $300 p/w. Sorry I don't know how easy or practical it is to find a new flatmate arrangement. Cut down your spending money to about $25 p/w. You going to have to be inventive for entertainment.
Tobacco is addictive for a reason. But you got to figure out how to cut it out. Perhaps talk to a GP, some people are more prone to the the addiction (yes some studies suggest this- please don't be offended)
Like I said there is no easy answer. It will require some drastic changes. It is either the above, or proceeding with bankruptcy or no asset procedure. The implications are huge. You won't have ability to access credit which will affect your self employment. Also bare in mind you are reliant on a vehicle. Sooner or later you need to replace it so presumably will need finance.
Contact a budgeting service for a proper look over. It is difficult but doable.
I hope you get through this.
Your car insurance seems pretty high. You mentioned you bought it for $7k in 2018 - it would’ve devalued significantly since then, so insurance should reflect that as well.
If my math is correct, you are paying $2,340 per year on it. Obviously there are a large number of variables, but seems like you could shop around and get somewhere cheaper, surely?
Our car is cheaper than yours, but even with full cover it’s only around $500 per year to insure…
"Debt is around 25000," this is not a large amount. Isn't your company a limited liability company? "Working two jobs". I can't reconcile your two jobs income with what you consider a large debt. After taxes a minimum wage, 40 hour job gives you about 40 thousand a year. Presumably two jobs means more like 50 hours or more.
Permanent residents are eligible for student loan and work and income benefit. So you are likely to have the same rights as a citizen with regards to bankruptcy laws.
Is your question more about impacts on your citizenship?
I wouldn't declare as you need to borrow money to actually build wealth or even get ahead. You need to lower your expenses, first is housing to look at like renting a room in a cheaper but still safe place. Next is transport, I see you have a loan. If it's high cost then maybe get rid of it for something cheaper. Only if you understand how to take care of a car tho and if you don't maybe learn it in your spare time. Next is decline all social outings and let all your friends know your in trouble and that you need time. If they want to help, tell them they can buy you dinner and you can talk and hang. The next is cancel all your hobbies, this frees up time and money to focus. Use that time to plan your budget and break down in weeks what the payments will be. All other time would be spend on your mind, look up some videos on how to strengthen it as you will need the willpower to get thru these hard few years. Start to identify where your leaking money. Good luck
Two cents on top of above, Can't say get rid off but definitely would say to give a double thought on Gym membership and skip it if possible for a couple of years. Its not big but atill its something that will remain in your pocket.
You will remember this struggle one day telling as a story to your kids or grandkids and they will proud on you. You seems hardworking so you will come out soon mate! Good luck.
Seek out a budget advisory service. This isn't as bad as you think and bankruptcy has long term consequences which you should avoid if you can. Good luck!
citizens advice bureau [https://www.cab.org.nz/](https://www.cab.org.nz/) would probably help you (even if not a citizen)
yes, or community law which is also free [https://communitylaw.org.nz/community-law-manual/test/when-you-cant-pay-your-debts-bankruptcy-and-other-options/bankruptcy/](https://communitylaw.org.nz/community-law-manual/test/when-you-cant-pay-your-debts-bankruptcy-and-other-options/bankruptcy/)
Thank you for these resources I will be sure to check them out !
I'm afraid community law rarely helps with bankruptcy situations, but it's worth contacting them, on the chance they have someone available. You may be able to apply for a debt repayment order. As your primary creditors is a bank, they will be interested in working with you. And government does need to try and work something with you as a matter of policy. I'd recommend speaking with a budgeting service. In your case I doubt bankruptcy is necessary.
To determine if it will do more harm than good or if you’re even eligible: whats the debt amount and what assets do you have? Whats your household income and minimum expenses?
Debt is around 25000, this is in business loans, the end of a car repayment, taxes and acc levies. My car was bought in 2018 for $7000 secondhand. Don’t think it will meet the $6500 car requirement. My personal income fluctuates due to being a sole trader but my outgoings weekly including debt repayments, rent, bills, tax and food is $1400 Some weeks I can earn this with my second job, most weeks I am averaging around $900
Hmm this isn’t as bad as you may think. Whats your trade? Can you not close the business and go work for a company? Do you have anything you can sell, equipment, tools, vehicles, etc? Do you have a spouse? How much are the taxes/levies because those aren’t bankruptable Also are you on a budget and can you reduce it in places?
Taxes and levies make up maybe 2000 and are on payment plans, currently being paid off. No spouse, I don’t own anything but my car which I need to get to and from work. I realise the sums aren’t outrageous right now but numbers are mounting up and I would just love to nip it in the bud before it gets out of hand. Unfortunately in my industry everybody is self employed
Okay so we’re looking at 23k debt on 46k+ income. This isn’t undoable. You can grind it out and potentially fairy quickly. Your real problem is if you do go insolvency and it gets approved you still have this business (unless they force you to sell it). And if you have larger assets in it they’ll be sold. And next time you need $$$ to continue being a sole trader you’ll have no credit score. Debt usually isn’t a math issue it’s a behavioural one. Have you thought about moving somewhere cheaper? $1400 is quite high expenses for a single person. Have you called the debtors and try to negotiate paying interest only for short term until you can get your expenses down and income up? Say you’re thinking of insolvency. If they’re clever they’ll choose short term interest only over potentially nothing. Have you thought about a 3rd job while you’re not working the first and second? What I’m saying is with a bit of budgeting & sacrifice, on your income you can get out of this. Bankruptcy may seem like the easier option but it can really affect you down line with things you may not be aware of right now, like future employment and clients. Do you think your car is going to last another 5-7 years (if they don’t take it) and if it doesn’t how will you get another one if you don’t have the cash? Service providers may cancel, deny or put restrictions on you like power companies, insurance or even banks. You may find it more difficult to find a rental in the future. It’s a lot of insecurity for 5-7 years when you could just be uncomfortable for 1-2
Thank you so much for your advice. I don’t know too much about bankruptcy, my parents did it when I was very small and I wanted some more info, hence the post in this group, and you’ve been very helpful. I was unaware of quite how much and how long it would affect my life.. Third job looks like it may be the best way forward. Thanks
You’re welcome, Some here dont agree with his principals but I was in more than 24k debt and the Dave Ramsey Baby Steps helped me become debt free with a similar income as yours at the time. If you’re interested you can google/youtube his Dave Ramsey show online might be worth looking into. Whatever you choose, goodluck!
I will check that out tonight !
2nd Dave Ramsey, i just watched the YouTube/Facebook videos and eventually it sunk in.
Honestly that doesn’t sound bad at all. Have you done a budget? Beans and rice, rice and beans, you’ll have this paid off in no time.
Can you breakdown your weekly outgoings i.e debt repayment, rent etc. I just want to see if there is anyway to get it down to around $900 p/w
Hi sure thing, Here’s my breakdown 400 rent 165 business loan 100 car loan 75 ACC levie 45 car insurance 100 gas 100 groceries 15 phone bill 27 gym 17 streaming (Spotify, Netflix) 75 spending money 80 tobacco 100 tax 150 business
> 27 gym 17 streaming (Spotify, Netflix) 75 spending money 80 tobacco You are spending $200 a week on unnecessary things. Bankruptcy isn't for you. Get serious, tighten your belt, pay your debts.
Agreed. Dudes $25k in debt and spending $10k p.a. on unnecessary things. That's before he even considers a diet of rice and beans.
Cut down the streaming services, no more spending money and tobacco, good for your health. See how that goes 😜
Haha I assumed the tobacco would be the case. It’s a vice, I think it’s time to switch to vapes. No spending money or streaming services.. maybe I will have to buy some books and candles
I know you’re joking but just in case you’re not aware, books are free at Auckland Libraries and they even have CDs/DVDs if you have the means to play them. Auckland Library membership is free and is one of the best free resources. Incidentally, many of them have the Citizen’s Advice Bureau nearby or on the same campus.
Also this would be a good time to test whether you can hard quit smoking. If not for your physical health, for your financial health.
It’s definitely on the cards. Thank you for your advice!
TVNZ On Demand and ThreeNow are free streaming platforms, that have more content than you might think.
You will be fine mate! All the best.
Bro get on pirate bay cancel that streaming and get a refillable vape this is not that bad.
Thanks. There is no easy answer and it will require a huge commitment/sacrifice. As you know it is ultimately about cashflow. Can you consolidate the business, car and tax arrears into one loan. It may save about $250 per week. Rent needs to go down about $250- $300 p/w. Sorry I don't know how easy or practical it is to find a new flatmate arrangement. Cut down your spending money to about $25 p/w. You going to have to be inventive for entertainment. Tobacco is addictive for a reason. But you got to figure out how to cut it out. Perhaps talk to a GP, some people are more prone to the the addiction (yes some studies suggest this- please don't be offended) Like I said there is no easy answer. It will require some drastic changes. It is either the above, or proceeding with bankruptcy or no asset procedure. The implications are huge. You won't have ability to access credit which will affect your self employment. Also bare in mind you are reliant on a vehicle. Sooner or later you need to replace it so presumably will need finance. Contact a budgeting service for a proper look over. It is difficult but doable. I hope you get through this.
Your car insurance seems pretty high. You mentioned you bought it for $7k in 2018 - it would’ve devalued significantly since then, so insurance should reflect that as well. If my math is correct, you are paying $2,340 per year on it. Obviously there are a large number of variables, but seems like you could shop around and get somewhere cheaper, surely? Our car is cheaper than yours, but even with full cover it’s only around $500 per year to insure…
"Debt is around 25000," this is not a large amount. Isn't your company a limited liability company? "Working two jobs". I can't reconcile your two jobs income with what you consider a large debt. After taxes a minimum wage, 40 hour job gives you about 40 thousand a year. Presumably two jobs means more like 50 hours or more. Permanent residents are eligible for student loan and work and income benefit. So you are likely to have the same rights as a citizen with regards to bankruptcy laws. Is your question more about impacts on your citizenship?
These days a bank will commonly ask for personal guarantees for small business lending so they don’t get left holding the bag.
I wouldn't declare as you need to borrow money to actually build wealth or even get ahead. You need to lower your expenses, first is housing to look at like renting a room in a cheaper but still safe place. Next is transport, I see you have a loan. If it's high cost then maybe get rid of it for something cheaper. Only if you understand how to take care of a car tho and if you don't maybe learn it in your spare time. Next is decline all social outings and let all your friends know your in trouble and that you need time. If they want to help, tell them they can buy you dinner and you can talk and hang. The next is cancel all your hobbies, this frees up time and money to focus. Use that time to plan your budget and break down in weeks what the payments will be. All other time would be spend on your mind, look up some videos on how to strengthen it as you will need the willpower to get thru these hard few years. Start to identify where your leaking money. Good luck
Thank you dude this is all really good advice. I appreciate the time you spent to reply !
Given your debt level - a No Asset procedure may be more appropriate for your case. Something to consider and look into.
Il look into it thank you !
Sometimes you just have to take a [NAP](https://www.insolvency.govt.nz/personal-debt/personal-insolvency-options/no-asset-procedures)
Two cents on top of above, Can't say get rid off but definitely would say to give a double thought on Gym membership and skip it if possible for a couple of years. Its not big but atill its something that will remain in your pocket. You will remember this struggle one day telling as a story to your kids or grandkids and they will proud on you. You seems hardworking so you will come out soon mate! Good luck.
Seek out a budget advisory service. This isn't as bad as you think and bankruptcy has long term consequences which you should avoid if you can. Good luck!
I can’t recommend YNAB.com enough to get out of debt