Payments from bankrupt tenant?
Question from Phillip updated on 12th July 2019:
We have had $6,100 awarded to us by the Tenancy Tribunal for intentional damage done to the flat during a tenancy. An attachment order was placed against his benefit and 13 payments have been made. As of 26 March, the tenant has successfully been declared bankrupt and payments have stopped. We have filed a creditor’s claim.
Are there any further steps that can be taken to retrieve these damages? We consider it unfair that a person who incurs debts through purposeful damage to property and who continues to draw an income from a benefit can have this debt cancelled.
Our expert Steve Watson responded:
I am assuming from your question that you know your situation regarding collection of the outstanding attachment order is covered under insolvency law as you have registered a claim. So I have asked our colleagues in the Insolvency and Trustee Service for some guidance as to whether there are any further actions you can take.
When a person enters a formal insolvency procedure, all proceedings to collect debts are stopped. This includes any court orders. As a creditor you can file a claim in the person’s insolvency – which you have done. There is no further action you can take other than to see any progress in the person’s insolvency through the insolvency.govt.nz website as a registered creditor.
Along with filing a claim, the insolvency website has explanations of the types of insolvency procedures (bankruptcy, no asset procedures, summary instalment orders) and what they entail. Visit www.insolvency.govt.nz for more information.
For more on the rights and responsibilities of landlords and tenants, go to www.tenancy.govt.nz or subscribe to our e-newsletter Tenancy Matters here.
The Ministry of Business, Innovation and Employment provides information and guidance on building law and compliance, services including weathertight homes, and advice for tenants and landlords.