Credit Unions are criticising Budgeting Services for offering people information on how to gain shorter-term bankruptcies.
In December 2007, No Asset Procedures was introduced as a one-year alternative to a full three-year bankruptcy for people with debts of less than $40,000 and no assets.
The Credit Unions Association says by suggesting this option, budgeting advisers are promoting an easy way out. Chief executive Doug McLaren says avoiding financial responsibilities does not allow any lessons to be learnt.
However, Federation of Family Budgeting Services chief executive Raewyn Fox says the procedure is only one option it offers people in financial trouble.
Ms Fox says its advisers prefer to help people learn to manage their money and not just show them how to fill in forms that will give them a financial quick-fix.
So far, 2303 applications have been accepted by the Ministry of Economic Development and 626 rejected.