The Growth of numbers of people that are applying for the 'No Asset Procedure (NAP)' continues even though we are told that NZ is on the way
out of the recession which has seen falling house prices, mortgagee sales and an increasing demand on services such as KiwiDebt who are
offering financial assistance to households.
Figures in the Website show an increase in the YTD figures for applications to the 'NAP' and increases in the Debtors Petition for bankruptcy.
The figures Highlight the growing concern for those on lower-middle incomes that have come to the end of their financial tether, and are seeking
out ways to get out of the financial mire, which has seen families cut back on food, clothing, and other essentials to be able to afford debt
which seems to be spiralling out of control.
Figures for comparison can be found here; No Asset Growth
It is not all bad news though, the survey which shows the comparison between Debtor Petitions vs Creditor Petitions, seems to show that of all
applications, Creditor Petitions are approx half of the amout of Debtor petitions.
Which would mean that creditors are taking a more active approach in dealing with people that are suffering financial hardship.
See the table here
Figures in relation to the 'Summary Installment Order' (SIO) seem to portray an alarming observation, that is that people are not just having
problems with their finances, but there is little or no money left to pay creditors.
With SIO approvals at just 10% of that of the NAP Approvals, we are led to believe that 10 times the amount of those able to make some form of
contribution to their debt are not able to contribute sufficient to their outstanding creditors.
The costs involved in the rise in GST have already been noted, with some retail chains repricing for the GST rise as early as August, and
comments from staff who have been observed re-ticketing have received the answer, 'Yes we are repricing for the gst rise, and I expect we
will be doing the same in Late September'.
The downstream cost to the consumer may see prices rise by as much as 15% over the next 6 months.
This will mean the equivalent of up to a 15% pay cut for families, without the likelihood of a pay increase.
Concerns raised by the writer of this page, are that the incresed costs related to the increase in GST will force those that have a marginal ability to
repay debt, into a classification similar to those above who are already going through NAP or petitioning for bankruptcy.
Compounding effects of the increase in living costs, may mean an increase in the number of those applying for insolvency / bankruptcy by as much as 50%
over the next 6 months.