On bankruptcy all money owed to IRD at the date of bankruptcy , with the exeption of Child Support but including Student Loan amounts, will form part of IRD's claim. IRD will write off any amount that cannot be recovered due to bankruptcy.
A liable person who becomes bankrupt still has to pay their existing Child Support debt, along with any future Child Support liability.
The Official Assignee will receive any tax refunds owing to the bankrupt taxpayer during the term of the bankruptcy. Once discharge from bankruptcy is obtained, any refunds go to the taxpayer , unless there are other post-bankruptcy tax debts.
A new IRD Number is automatically issued by IRD from the date of bankruptcy, so that IRD can keep pre- and post- bankruptcy tax accounts separate. Bankrupt taxpayers need to give their new IRD Number to all parties who previously held the pre-bankruptcy IRD Number e.g employers, banks, and Work and Income (including its StudyLink service for subsequent student loans drawn down)
A bankrupt is required to file all returns due up to the date of bankruptcy. If a bankrupt is required to file for income tax, they must file one return from 1 April to the date of bankruptcy, under the original IRD Number, and another return from the date of bankruptcy until 31 March, under the new IRD number.
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