The Operation and Development of New Zealand's Personal Insolvency Regime in 2020

Abstract

This report reviews patterns of use and case law developments in relation to New Zealand’s personal insolvency law regime in 2020. The Insolvency Act 2006 (NZ) governs personal insolvency in New Zealand. The Act is administered by the Insolvency and Trustee Service (ITS), a division of the Ministry of Business, Innovation and Employment (MBIE). The Act sets out five formal and collective insolvency procedures available to insolvent, natural persons: bankruptcy; a proposal for repayment of debt which must be accepted by a debtor’s creditors and approved by the High Court; a debt repayment order where a debtor whose total unsecured debts are not more than $50,000 becomes subject to an order made by the Official Assignee that they repay their debts by instalments; the no asset procedure, akin to a mini-bankruptcy and available where a debtor’s total unsecured debts are not more than $50,000; and a composition where a bankrupt’s creditors and the court approve an arrangement under which creditors receive payment of their debts and the bankruptcy is annulled.