Handling Debt in New Zealand

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solutionsThe Credit Contracts and Consumer Finance Act 2003 and the Credit (Repossession) Act protects a person when they’re borrowing money for domestic and personal use in New Zealand. This extends to people when they’re using credit cards, store cards, or purchasing goods and services on credit. It’s also applicable when they’re using cash loans, as well.

If you’re buying on credit, it’s the same as buying with cash. The potential purchaser should always be discerning and thoroughly compare the options that they have – regardless of how attractive the offer looks from the onset. This will go a long way in making an informed decision.

As you know, there’s are some drawbacks to this. In the event that you don’t pay what is owed, you can expect for the bill collectors to hunt you down to get their money back. When you’re borrowing money, it pays to actually know what happens if you can’t pony up the money. The stipulations may be a bit higher than you’d anticipate. The creditor may even be able to take back whatever is of value to them. This could make a bad problem worse; it may mean that you can’t cover yourself if there’s a dire situation where you’d need the funds.

It’s for this reason that you should thoroughly understand the policies that the different companies are presenting you. From there, you’ll have a good idea as to which one will work out for you, as they’ll more than likely have detailed steps entailing what will happen if you don’t pay them. If you’ve already signed a contract, it really pays to go back and understand what you’ve signed.

If you miss a payment, you can expect your credit to suffer, as all of this information is documented and displayed on your credit record. The prospective creditor uses this record and determines whether or not you’re worth lending funds to, and it can present problems for people who have unsatisfactory credit.

It should be said that any company can just take the goods from you. They can only take these items if they have actually placed it in writing. The document has to be signed and dated by you for it to be legal. It’s then applicable if a payment period has elapsed and you haven’t held up to your end of the deal. This can include breaking another term in the agreement. The aforementioned act – the Credit Repossession Act – only assures that the creditors follow certain guidelines when they’re trying to take the goods back.

Some people untruly believe that this act also gives them the right to repossess goods. That’s not the case. When borrowing, the person who signs the contract is the only person that allows a company to repossess. When a person signs any kind of credit contract, they have to be vigilant in knowing whether or not it has some kind of clause that allows them to repossess the goods.

In the event that it’s found that they can legally repossess your things, they much first give you notice in writing. They have to send what’s called a ‘prepossession’ notice. This notice states how much you owe. Upon receipt of this notice, you have 15 days to think about what your next course of action is. You have two options: make the payment or give them the products back.

There is one way that they can get around this. If the creditors feel and can prove that your assets are at any kind of significant risk, they don’t have to send you any written notice at all. This eliminates the need for them to wait two weeks. The definition of “at risk” goods mean that they’re “damaged, disassembled, removed, endangered, or destroyed.” This breaches your contract, and as such, they have the right to ascertain the applicable goods.

That said, no one wants to have their goods taken away from them, and there are some steps that you can take to keep that from happening. If you can’t pay your debts, or are having a lot of trouble doing it, you have the option of consulting a budget advisor. There are some agencies that can help you in your local area and can easily be found with a little searching. Alternatively, you can also call 0508 BUDGETLINE. They employ some highly-trained personnel, and they should have a local office in your part of the country.

Unfortunately, there are some people who can’t pay their debts at all. If you feel as if that’s you, you may want to try and claim insolvency. This can be done through Bankruptcy, a No-Asset Procedure, or even a Summary Installment Order. The definition of insolvency is pretty simple. It means that your can’t pay your debts due to your expenditures exceeding your income, or you owe more than you actually own. The ability to claim insolvency depend on how much money you actually owe.

Should you go this route, there are some things that you’ll need in the name of preparation. You’ll need all documentation – this includes contracts, statements, and invoices – to present to the Official Assignee. With this information, you’ll be able to verify your particular financial position and see whether or not you can claim it. Whether you’re eligible or not depends on the value of assets, the nature of the debt, and whether or not you’ve been declared insolvent in the past. If you need more information regarding insolvency, be sure to call 0508 INSOLVENCY, as they’re the best resource regarding the whole matter.

If you’re facing problems for creditors, you have some options there, too. The Fair Trading Act and the Harassment Act 1997 prevents any creditor from using harassment or coercion to get people to pay their debts. This act is held up by the Commerce Commission. If they have sufficient proof that there are companies breaching this act, they have the ability to take them to court. If they’ve found guilty of the charges levied against them, they will be told to stop and pay some sort of restitution. The borrower has up to three years after the loss to bring this civil penalty up to the appropriate commission.

If the trader keeps harassing the borrower, they may even face some kind of criminal charges. Not only that, they can also be fined up to $200,000. If it’s a sole proprietor, they can face up to $60,000 in fines, plus any associated costs with the contract. As with the civil penalty, the timetable in which criminal proceedings may take place is within three years from the time that the infraction taken place. If needed, the borrower also has the ability to apply to the High Court for an injunction, or consult the Commerce Commission.

Limitation Act 2010

The Limitation Act 2010 is an update to the act developed in 1950. It makes the process easier and provides more relevant information. This update ups the limitation period of most claims to six years after the act has transpired. After this six years, the defendant can attempt to limit as a defence against the charges brought against them.

As said, this update makes room for people to file various types of claims. Of all of the things that stand out, a referendum in the newer Limitation Act is the three-year late knowledge period. Now, a limitation may actually end before one of the interested parties find out that there is a claim. This allows the claimant to have three years to bring evidence proving transgressions, allowing more of a chance for them to file their claim.

They have also offered a measure to keep defendants from eternally being at fault. Their answer to this is a 15 long-stop defence. This means that the defendant will be able to argue the claim after a decade and a half, ultimately trying to prove that the claim is out of time, even if the claimant wasn’t made of such a claim earlier. This doesn’t nullify what’s stated in the Limiation Act 1950; it applies to claims before the bill comes into play. If the claim falls under the 1950 act, they have to be brought before the court fifteen years from the date of the act. It can also be 5 years after the commencement of the new act.

Usually, this means that the old Act will be out of effect 15 years from the new Act’s commencement, unless in certain circumstances. As always, there discretion will also be a factor in those type of cases.

Source: http://www.legislation.govt.nz/act/public/2003/0052/latest/DLM211512.html

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