By Tony Johnson - 14 Jul 2017
Generally, upon bankruptcy, everything you own vests in
the Official Assignee. The recent High Court decision in
Hargraves re-affirmed however that there are
important exceptions.
The Court of Appeal had previously decided that a KiwiSaver
entitlement did not pass to the Official Assignee. In
Hargraves, the Official Assignee argued that if the
bankrupt died while still bankrupt, this exception no longer
applied. Fortunately for the estate of Mr Hargaves, the Official
Assignee was unsuccessful. Even upon death, the rights to the fund
remained with the Estate. They do not pass to the Official
Assignee.
A recent matter we were involved in illustrated another example
where property does not pass. The Official Assignee accepted our
submission that a grievance award under the Employment Relations
Act obtained while the person was bankrupt, was not able to be
claimed by the Official Assignee. The reasoning being that the
right of action was one personal to the bankrupt (relating to
humiliation and hurt feelings).
Another example would be an award for a personal action for
slander, the award reflecting a personal loss (this time of
reputation).
As these examples show, it is well worth investigating whether
certain parts of your personal property do not pass to the Official
Assignee. Bankrutpcy can be an extremely stressful time, and any
financial break is welcome.
If you have any questions relating to the laws of personal
bankruptcy, please contact us.
Contact
Tony
Johnson