The No Asset Procedure (NAP) was introduced in December 2007 as a means to assist people who have no available assets or insufficient income to repay debts up to $40,000 without entering bankruptcy. The programme has assisted over 7,000 people since implementation, and the cost to government for administering the programme is estimated at around $2 million each year.
The policy was introduced after review of the insolvency law, owing to changes in the types of debtors applying for bankruptcy. Cabinet Paper EDC (02) 90 stated that an increasing number of bankrupts were ‘consumer bankrupts’, consisting of a high number of beneficiaries, on low incomes, with a pool of debt comprising utilities debts, IRD debt, credit card debt and loans from finance companies or banks.
The evaluation reported here aimed to assess a) the cost-effectiveness of NAP (compared to other options), b) the impact of the scheme on users, c) the reach and uptake of NAP, and, d) the quality of the scheme administration.
The study covered debtors who were eligible to use NAP (this group comprising disproportionate numbers of beneficiaries, people on low incomes and unemployed people), Non-Government Organisations (NGOs), budget advisers and administrators who dealt with NAP applicants, and creditors and financial institutions.