NZ Herald
  • Home
  • Latest news
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather forecasts

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
    • The Great NZ Road Trip
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
    • Cooking the Books
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • What the Actual
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business / Economy / Employment

More go broke from job loss

By Maria Slade
Herald on Sunday·
4 Dec, 2010 04:30 PM4 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

The main reasons for going broke were job loss, sickness and marital breakup. Photo / Martin Sykes

The main reasons for going broke were job loss, sickness and marital breakup. Photo / Martin Sykes

Nearly 3000 New Zealanders went broke in the year to June because of losing their jobs.

An analysis by the Insolvency and Trustee Service [ITS] shows that in 42 per cent of personal insolvency cases last year, unemployment or loss of income was the major cause.

A total of 6426 people were declared insolvent in 2009-10, an increase of 14 per cent on the previous year.

The next most significant reason given for going broke was relationship failure.

Of all the insolvency applications accepted by the ITS in the past year, 47 per cent were No Asset Procedures - the alternative to bankruptcy brought in two years ago that allows people with consumer debt of less than $40,000 to wipe the slate clean.

More than half of those accepted for the NAP regime said losing their jobs or income were the main reasons for their situation.

More women than men entered the NAP regime, and more women under 40 were insolvent.

However, this reversed in the over-40 age group, with more men than women declared insolvent and a much greater proportion of males (77 per cent) than females bankrupted following a petition by a creditor.

John Roberts, managing director of credit reporting bureau Veda Advantage, said the main reasons for going broke were job loss, sickness and marital breakup. "They're the three key events."

The large number of NAPs and younger people becoming insolvent was being reflected in the number of bill defaults the credit bureau was seeing, "especially for this year among what we call the Generation Y, the 28 years or younger".

It was because of a combination of credit card debt and hire-purchase deals with two- and three-year no-payment, interest-free periods.

"And then suddenly the payments have come home to roost and they haven't been able to meet their commitments and so they've applied for No Asset Procedure."

The ITS figures show that 161 of its debtors last year had between five and nine credit cards, and another handful had more than 10. Roberts said when people got into a debt spiral they often began "credit surfing" - applying for more credit so they could pay off existing cards. "A very high percentage of people actually tell porkies on their [credit card] application forms."

There was no way of knowing how many lines of credit people had, therefore the industry was supportive of the Government's planned move to "positive" credit reporting which would allow agencies to have more information about people, he said.

Roberts said insolvency affected all ethnic groups. The ITS figures show the largest group of those becoming insolvent last year were New Zealand Europeans, at 58 per cent, followed by Maori at 18 per cent.

It was quite often middle-class, white-collar people who had large credit card limits and who had borrowed against their homes to buy consumer items who became insolvent, he said. "When they lose their jobs they're hit the hardest."

A survey by credit bureau Dun and Bradstreet in July last year found that nearly half of the people asked could not survive more than a month if they lost their job.

New Zealand GM John Scott said this highlighted the "hand-to-mouth" existence many New Zealanders had.

The No Asset Procedure figures reflected the fact that the new regime was being seen as a good way out of financial strife. But debtors had to remember that it stayed on their credit record for five years. "People need to think long and hard before they take this route."

The economic recovery had been lower and slower than following previous recessions and the bureau predicted there could be another rise in unemployment in the current quarter, he said.

Roberts said Veda Advantage believed there would be another six months of pain before insolvencies tailed off.

Out of pocket

* No Asset Procedure: when you owe less than $40,000, have no assets and have never been insolvent. Lasts one year.

* Bankruptcy Debtor Petition: filing for bankruptcy. Lasts three years.

* Bankruptcy Creditor Petition: when someone you owe money to asks the court to adjudicate you bankrupt. Lasts three years.

* Summary Instalment Order: when you owe less than $40,000 and reach an agreement with creditors to repay some or all of the money. Lasts three years.

maria.slade@hos.co.nz

Discover more

Employment

Unemployment drops to 6.4pc, dollar jumps

03 Nov 10:55 PM
Employment

Economists dubious about unemployment data

04 Nov 02:32 AM
Employment

Unemployment drops as 23,000 get work

04 Nov 04:30 PM
Personal Finance

Bankruptcy abused

04 Dec 04:30 PM
Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.
Save

    Share this article

Latest from Employment

Premium
Business|economy

Jobless rate better than expected, part-time worker increase credited

07 May 03:30 AM
Employment

Unemployment remains unchanged at 5.1%

06 May 10:50 PM
Premium
Property

'Decades of experience' – Craig Heatley company, Hoppers plan $220m marina

06 May 02:00 AM

One tiny baby’s fight to survive

sponsored
Advertisement
Advertise with NZME.

Latest from Employment

Premium
Jobless rate better than expected, part-time worker increase credited

Jobless rate better than expected, part-time worker increase credited

07 May 03:30 AM

The labour market remained weak and disinflationary, economists say.

Unemployment remains unchanged at 5.1%

Unemployment remains unchanged at 5.1%

06 May 10:50 PM
Premium
'Decades of experience' – Craig Heatley company, Hoppers plan $220m marina

'Decades of experience' – Craig Heatley company, Hoppers plan $220m marina

06 May 02:00 AM
Premium
Unemployment set to rise to highest level in nearly a decade

Unemployment set to rise to highest level in nearly a decade

04 May 05:00 PM
Connected workers are safer workers 
sponsored

Connected workers are safer workers 

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • What the Actual
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven CarGuide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP