1 Title
2 Commencement
Part 1
Interpretation and scope
3 Interpretation
4 Rights and powers under other Acts not affected
5 Act binds the Crown
6 Corporations and other entities not subject to Act
Part 2
Nature of bankruptcy, and process of being made bankrupt
Subpart 1—Bankruptcy and its alternatives
7 Nature of bankruptcy
8 Alternatives to bankruptcy
Subpart 2—Process of being made bankrupt
9 Introduction to subpart 2
Adjudication
10 Adjudication
11 Adjudication by court
12 Adjudication on debtor's initiative
Court adjudication on creditor's application
13 When creditor may apply for debtor's adjudication
14 Application by secured creditor
15 Court's permission required for withdrawal of application
Acts of bankruptcy
16 Requirement of act of bankruptcy
17 Failure to comply with bankruptcy notice
18 Disposition of property to trustee for benefit of creditors
19 Fraud or intent to prefer a creditor
20 Departure from New Zealand
21 Avoidance of creditors
22 Notice of suspension of debts
23 Admission to creditors of insolvency
24 Possession under execution process
25 Writ of sale
26 Return that sufficient goods not found under execution process
27 Removal or concealment of property
28 Unsatisfied judgment for non-payment of trust money
Bankruptcy notice
29 Form of bankruptcy notice
30 Effect of overstatement of amount owing
Effect on execution process of filing creditor's application
31 Creditor's execution process must not be issued or continued
32 Execution processes by other creditors
33 Execution process issued by another court
34 No restriction on execution process if application for adjudication withdrawn or dismissed
35 Meaning of execution process
Court's options when hearing creditor's application
36 Court may adjudicate debtor bankrupt
37 Court may refuse adjudication
38 Court may halt application
39 Orders if more than 1 application
40 Orders if more than 1 debtor
41 Order that disposition or proposal not act of bankruptcy
42 Halt or refusal of application when judgment under appeal
43 Court may halt application while underlying debt determined
44 Substitution of creditor
Debtor's application
45 When debtor may file application
46 Debtor must first file statement of affairs
47 Debtor automatically adjudicated bankrupt
48 Debtors' joint application
49 Steps for filing debtor's application
Subpart 3—Appointment of receiver
Power of court to appoint Assignee as receiver
50 Application for appointment of Assignee as receiver
51 Additional orders after receiver's appointment
52 Appointment of Assignee as receiver and manager must be advertised
53 Execution process halted
54 Effect when execution process halted
Subpart 4—Adjudication
Adjudication
55 Bankruptcy commences on adjudication
56 Date of adjudication
57 Date and time of adjudication must be recorded
58 Registrar must notify Assignee of adjudication by court
59 Official Assignee must nominate Assignee
60 Presumption that act or transaction entered into or effected after adjudication
61 Adjudication final and binding
62 Public register of discharged and undischarged bankrupts
Subpart 5—What happens on adjudication
63 Debtor adjudicated bankrupt called the bankrupt
64 Outline of what happens on adjudication
Assignee must advertise adjudication
65 Assignee must advertise adjudication
66 Order that Assignee must not advertise pending appeal or application for annulment
Bankrupt's statement of affairs
67 Bankrupt must file statement of affairs with Assignee
68 Notice that bankrupt must file statement of affairs
69 Time for filing statement of affairs
70 Bankrupt may file additional or amended statements or answers
Assignee must call meeting of creditors
71 Assignee must call meeting of creditors
72 Time when meeting must be held
73 Assignee may dispense with first creditors' meeting
74 Notice that first creditors' meeting should not be called
75 Documents to be sent with notice of meeting
Court proceedings are halted
76 Effect of adjudication on court proceedings
Execution process
77 Execution process must not be begun or continued after adjudication advertised
Bankrupt's death
78 Effect of bankrupt's death after adjudication
Subpart 6—Role of creditors
79 Overview of creditors' role in bankruptcy
Creditors' meetings
80 Types of creditors' meetings
81 Subsequent meetings
82 Meeting and resolution not defective for lack of notice
Conduct of creditors' meetings
83 Chairperson
84 Chairperson may adjourn meeting
85 Assignee must report to meeting
86 Attending creditors' meeting
87 Bankrupt may be required to attend and be questioned
88 Attendance by non-creditors
89 Minutes and record of meeting
90 Number of persons for valid meeting
91 Who may represent creditor or bankrupt
92 Voting at meetings
93 Postal and electronic votes
94 Who may vote at creditors' meeting
95 When secured creditor may vote
96 When creditor under bill of exchange or promissory note may vote
97 Person disqualified from voting through preferential effect
98 Creditor of partner
99 Creditors may appoint expert or committee to assist Assignee
Documents
100 Creditor's right to inspect documents
Part 3
Dealing with bankrupt and bankrupt's property
Subpart 1—Status of bankrupt's property
General
101 Status of bankrupt's property on adjudication
102 Status of property acquired during bankruptcy
103 Property vests in replacement Assignee
104 Property held in trust by bankrupt
105 Effect of other laws
106 Court may order that money due to bankrupt is assigned to Assignee
107 Application of section 274 to payments by bankrupt or assignments by court
Bankrupt's property subject to execution process
108 When execution creditor may retain execution proceeds
109 Effect of notice to sheriff of adjudication
110 Sheriff must retain proceeds of execution for 10 working days
111 Purchaser under sale by sheriff acquires good title
112 Court may set aside rights conferred on Assignee
Validity of property transactions with bankrupt
113 Transaction in good faith and for value after adjudication
114 Executions and attachments in good faith
115 When execution or attachment completed for purposes of section 108 or 114
116 Assignee's interest in property passes
Disclaimer of onerous property
117 Assignee may disclaim onerous property
118 Effect of disclaimer
119 Position of person who suffers loss as result of disclaimer
120 Assignee may be required to elect whether to disclaim
121 Liability for rentcharge on bankrupt's land after disclaimer
Land subject to mortgage
122 Transmission of interest in land
123 Assignee cannot claim interest in land if bankrupt remains in possession until discharge
Shares and other securities
124 Assignee may transfer shares and other securities
125 Assignee may disclaim liability under shares
126 Assignee may be required to elect whether to disclaim liability under shares
127 Transfer of shares after disclaimer
128 Company may prove for unpaid calls
Consumer goods on hire purchase
129 Meaning of hire purchase terms used in this subpart
130 Restrictions on creditor dealing with consumer goods
131 Assignee's powers in relation to hire-purchase consumer goods
132 Creditor in possession of consumer goods may prove in bankruptcy if Assignee has not exercised powers
133 Creditor may assign consumer goods to Assignee
Second bankruptcy
134 Status of bankrupt's property on second bankruptcy
135 Effect of notice to Assignee of application for adjudication
Persons jointly adjudicated bankrupt
136 Separate accounts
137 How joint and separate estates must be applied
Subpart 2—Duties of bankrupt
138 General duty of bankrupt
Duties in relation to property
139 Bankrupt must disclose property acquired before discharge
140 Bankrupt must deliver property to Assignee on demand
141 Bankrupt must take all steps required in relation to property and distribution of proceeds to creditors
Duties to provide information
142 Bankrupt must give Assignee accounting records and other documents
143 Bankrupt must give Assignee information relating to property
144 Bankrupt must give Assignee information relating to income and expenditure
145 Bankrupt must notify Assignee of change in personal information
146 Bankrupt must give Assignee financial information
Subpart 3—Control over bankrupt during bankruptcy
147 Bankrupt may be required to contribute to payment of debts
148 Onus of proof if bankrupt defaults in making payment
149 Prohibition of bankrupt entering business
150 Warrant to search for and seize bankrupt's property
151 Seizure of bankrupt's property
152 Bankrupt must vacate land or buildings if required to do so
153 Bankrupt's right to inspect documents
Restrictions on bankrupt dealing with property
154 No power to recover property or give release or discharge
155 No steps to defeat beneficial interest
Bankrupt's bank accounts
156 Bank must notify Assignee of bankrupt's account
157 Assignee may require bank to search account records
Subpart 4—Provision for bankrupt during bankruptcy
Provision for bankrupt
158 Bankrupt may retain certain assets
159 Bankrupt may retain certain assets with consent of creditors
160 Retention of assets does not affect rights under charge or hire purchase agreement
161 Retention provisions do not confer rights to other assets
162 Relative or dependant may exercise bankrupt's right to retain assets
163 Assignee may make allowance to bankrupt
164 Assignee may allow bankrupt to retain money
Subpart 5—Powers of Assignee and court to examine bankrupt and others
Examination of persons summoned by Assignee
165 Assignee may summon bankrupt and others to be examined
166 Conduct of examination of person summoned by Assignee
167 Expenses of person summoned by Assignee
168 Creditor may inspect record of examination
169 Report of examination must not be published unless court consents
170 Examination provisions also apply when Assignee appointed receiver and manager of debtor's property
171 Assignee may obtain documents
172 No lien over bankrupt's documents and other records
Bankrupt's public examination
173 Court must hold public examination if Assignee or creditors require
174 Notice of examination
175 Time for holding examination
176 Assignee must file report before examination
177 Conduct of examination
178 Record of examination
179 When examination ends
180 Bankrupt's failure to attend examination
181 Bankrupt's expenses in attending examination
Investigation of company controlled by bankrupt and associate
182 Assignee may examine company documents, personnel, and shareholders
183 Meaning of associate
Privilege and representation of persons examined
184 No privilege against self-incrimination
185 Statement made by person examined or questioned not generally admissible in criminal proceedings against that person
186 Representation
Subpart 6—Status of bankrupt's contracts
Bankrupt's contracts entered into before adjudication
187 Assignee may continue or disclaim bankrupt's contract
188 Contract terminated by other contracting party
Transaction with bankrupt in ignorance of adjudication
189 Payment of money or delivery of property is good discharge
Joint contractual liability
190 Bankrupt's co-contractor may sue and be sued
Lawyers' costs
191 Lawyers' costs
Subpart 7—Irregular transactions before adjudication
192 Overview of subpart 7
193 Extension of 2 years and 6 months periods
Insolvent transactions
194 Insolvent transaction may be cancelled
195 Meaning of insolvent transaction
196 Insolvent transaction presumed
197 When series of transactions must be regarded as single transaction
Insolvent charges
198 Insolvent charge may be cancelled
199 Charge for new consideration or charge in substitution not affected
200 Presumption that bankrupt unable to pay due debts
201 Charge for unpaid purchase price given after sale of property
202 Appropriation of payments by bankrupt to secured creditor
203 Charge agreed before specified period may not be cancelled
Insolvent gifts
204 Insolvent gift within 2 years may be cancelled
205 Insolvent gift within 2 to 5 years may be cancelled if bankrupt unable to pay debts
Procedure for cancelling irregular transactions
206 Procedure for cancelling irregular transactions
207 Court may order retransfer of property or payment of value
208 Limits on recovery
209 Recovery by appointee
210 Land Transfer Act 1952 does not limit sections 206 to 209
Transactions at undervalue
211 Assignee may recover difference in value
212 When Assignee may recover difference
Bankrupt's contribution to another person's property
213 Court may order recipient to pay value to Assignee
214 Court's powers in relation to bankrupt's contribution to recipient's property
215 How Assignee must use repayment of bankrupt's contribution to property
216 Land Transfer Act 1952 does not limit sections 213 to 215
Subpart 8—Role and powers of Assignee
Powers of Assignee
217 Assignee's general powers
218 Assignee must not sell bankrupt's property before first creditors' meeting
219 Title of purchaser from Assignee
220 Obligation to bank and power to invest money
221 Assignee may assign right to sue under this Act
222 Proceedings by Assignee when bankrupt is partner in business partnership
Notice by Assignee
223 Means of giving notice to creditors
Assignee's decisions
224 Assignee's discretion
225 Assignee may apply for directions by court
226 Appeal from Assignee's decision
Assignee's accounting records
227 Assignee must keep proper accounting records
228 Assignee's final statement of receipts and payments
229 Auditor-General may audit Assignee's accounts
230 Assignee may return or destroy accounting records
Subpart 9—Creditors' claims
Provable debts
231 Meaning of provable debt
232 What debts are provable debts
Procedure for proving debt
233 Creditor must submit creditor's claim form
Role of Assignee in examining creditor's claim form
234 Assignee must examine creditor's claim form
235 Assignee must give creditor notice of grounds of rejection
236 Assignee's power to obtain evidence of debt
237 Notice to Assignee to admit or reject creditor's claim
238 Court may cancel creditor's claim
239 Court may reverse or modify Assignee's decision rejecting creditor's claim
240 Parties to application to court in relation to creditor's claim
241 Which court may hear application in relation to creditor's claim
242 Court may make order as to costs
Secured creditors
243 Secured creditor's options in relation to property subject to charge
244 Assignee may require secured creditor to choose option
245 Assignee not required to act in relation to certain property subject to charge
246 Realisation of property subject to security
247 Valuation of charge and proof for balance due
248 False claim by secured creditor
249 Assignee's powers when secured creditor values property subject to charge and proves for balance
250 Secured creditor who surrenders charge may withdraw surrender or submit new creditor's claim
Creditors' claims subject to uncertainty
251 Assignee may estimate amount of uncertain creditor's claim
252 Application to court to determine amount of uncertain creditor's claim
Creditors' claims payable after adjudication
253 Creditor's claim payable 6 months or more after adjudication
Set-off
254 Mutual credit and set-off
Set-off under netting agreement
255 Definitions relating to set-off under netting agreement
256 Application of set-off under netting agreement
257 Calculation of netted balance
258 Mutuality required for transactions under bilateral netting agreements
259 When mutuality required for transactions under recognised multilateral netting agreements
260 Application of set-off under section 254 to transaction subject to netting agreements
261 Transactions under netting agreement and insolvent transactions
262 Set-off under netting agreement not affected by notice under section 206(2)
263 Disclaimer of onerous property and termination of netting agreement not permitted
Interest
264 Pre-adjudication interest
265 Post-adjudication interest at prescribed rate if surplus remains
266 Additional post-adjudication interest on contract or judgment debt if surplus remains
267 Meaning of prescribed rate
Miscellaneous provisions relating to creditors' claims
268 Creditor must deduct trade discounts
269 Proof when charge void
270 Judgment creditor may prove for costs
271 Company may prove for unpaid calls
272 When guarantor for bankrupt may prove
Subpart 10—Distribution of assets
273 Priority of payments for distribution of bankrupt's assets
Preferential claims
274 Priority of payments to preferential creditors
275 Conditions to priority of payments to preferential creditors
276 Provisions concerning preferential payments to employees
277 Subrogation of persons if payment has been made
278 Priority given to person who distrains on goods
279 Creditors to have priority over creditors of joint bankrupt
Payments to general creditors and to bankrupt
280 Payment of remaining money to general creditors
281 Payment of surplus to bankrupt
Undistributed money paid to Public Trust
282 Definition of undistributed money
283 Undistributed money to be paid to Public Trust
284 Public Trust to hold undistributed money
285 Public Trust to pay undistributed money to bankruptcy surplus account
286 Application of undistributed money held in bankruptcy surplus account
287 Requisition of Minister required for payment under section 286(c)
288 Approval of Official Assignee required for payment under section 286(d)
289 Matters concerning bankruptcy surplus account
Part 4
End of bankruptcy
Subpart 1—Discharge from bankruptcy
Automatic discharge from bankruptcy
290 Automatic discharge 3 years after bankrupt files statement of affairs
291 Effect of automatic discharge
292 Objection to automatic discharge
293 Objection may be withdrawn
Application for discharge from bankruptcy
294 Bankrupt may apply for discharge
Examination concerning discharge from bankruptcy
295 When bankrupt must be examined concerning discharge
296 Assignee's report
297 When creditor must give notice of opposition to discharge
298 Court may grant or refuse discharge
299 Court may restrict bankrupt from engaging in business after discharge
300 Court may reverse order of discharge
301 Grounds for reversing discharge
302 Effect of reversal of discharge
303 Bankrupt may apply for absolute discharge if conditions of discharge too onerous
304 Debts from which bankrupt is released on discharge
305 Discharge conclusive evidence of bankruptcy
306 Discharge does not release partners and others
307 Discharged bankrupt must assist Assignee
308 Information regarding bankrupt's discharge must be contained in public register maintained under section 62
Subpart 2—Annulment
309 Court may annul adjudication
310 When Assignee may annul adjudication
311 Effect of annulment
Part 5
Compositions, proposals, summary instalment orders, and no asset procedure
Subpart 1—Composition during bankruptcy
312 Creditors may accept composition by passing preliminary resolution
313 Confirming resolution
314 Compositions with members of partnership
315 Court must approve composition
316 Procedure for court approval of composition
317 Deed of composition
318 Effect of deed
319 Bankrupt remains liable for unpaid balances of certain debts
320 Deadlines for steps to approve composition and execute deed
321 Procedure following court approval of composition
322 Enforcement of composition
323 Court's exclusive jurisdiction
324 Law and practice in bankruptcy applies to deed
Subpart 2—Proposals
325 Meaning of debt, etc
326 Insolvent may make proposal
327 Form of proposal
328 Proposal must be filed in court
329 Provisional trustee
330 Provisional trustee must call meeting of creditors
331 Procedure at meeting of creditors
332 Who may represent creditors
333 Court must approve proposal
334 Effect of court approval
335 Creditor must not take enforcement steps without court's permission
336 Duty of insolvent
337 Duties of trustee
338 Trustee must file 6-monthly summary of receipts and payments
339 Cancellation or variation of proposal
Subpart 3—Summary instalment orders
340 Summary instalment order
341 Who may apply for order
342 Form of application
343 Assignee may make summary instalment order
344 Additional orders
345 Appointment of supervisor
346 Role of supervisor
347 Assignee may require supervisor or past supervisor to provide documents
348 Termination of appointment for failure to supervise adequately
349 Period of instalments
350 Variation or discharge of order
351 Effect of order
352 Proceedings against debtor
353 Supervisor must give notice of summary instalment order to creditors
354 Public register of debtors subject to current summary instalment order
355 Meaning of current summary instalment order
356 Creditor's claim
357 Payment of debtor's earnings to supervisor
358 Distribution of money paid by debtor
359 Default by debtor
360 Offence of obtaining credit
Subpart 4—No asset procedure
361 Introduction to this subpart
Entry to no asset procedure
362 Application for entry to no asset procedure
363 Criteria for entry to no asset procedure
364 Debtor disqualified from entry to no asset procedure in certain cases
365 Assignee must notify creditors
366 Restrictions on debtor obtaining credit after application made
367 When debtor admitted to no asset procedure
368 Public register of persons admitted to no asset procedure
Effect of entry to no asset procedure
369 Creditors may not enforce debts
370 Debtor's duties after entry to no asset procedure
371 Offence of obtaining credit
Termination and discharge
372 Termination
373 When Assignee may terminate
374 Assignee may apply for preservation order
375 Effect of termination
376 Creditor may apply to Assignee for termination
377 Time of discharge
377A Effect of discharge
377B Discharge does not release partners and others
Part 6
Insolvent deceased estates
378 Interpretation
Application and order that estate be administered under this Part
379 Court may order that estate be administered under this Part
380 Application by administrator, etc
381 Application by creditor or beneficiary for order under this Part
382 Notice of application by creditor or beneficiary
383 When Registrar may hear application
384 Costs of application
385 Court may order administration by Assignee or Public Trust
386 Certificate filed by Public Trust or Māori Trustee has effect as application and order
Effect of order that estate be administered under this Part
387 Estate vests in appointee
388 Appointee must realise, administer, and distribute estate
389 Entitlement of surviving spouse to household furniture and effects
390 Appointee may make allowance to surviving spouse
Administration of estate under this Part
391 Sections 392 to 398 apply in respect of estate administered under this Part
392 Appointee's authority, powers, and functions
393 Distribution of estate
394 Payment of surplus
395 Creditor's notice to administrator
396 Appointee may act in relation to deceased's irregular transactions
397 Appointee may cancel execution
398 Administrator's acts valid before notice
Part 7
Offences and miscellaneous provisions
Subpart 1—The Assignee
399 Appointment of Official Assignee for New Zealand and others
400 Assignee may act on behalf of another Assignee
401 Assignee's use of name, seal, etc
402 Assignee's additional rights and remedies
403 Disqualification of Assignee
404 Vacation of office by Assignee
405 Protection of Assignee
406 Assignee's remuneration
407 Rates of Assignee's remuneration
408 Assignee must apply for order of release
409 Effect of order
410 Subsequent order of release
Subpart 2—The court
411 Jurisdiction and powers of court
412 Court may look at real nature of transaction
413 When Registrar or District Court Judge may exercise powers and jurisdiction of court
414 Rehearings and appeals
415 Proceedings not halted pending appeal
416 Suspension of adjudication pending appeal
417 Court may extend time
418 Defects in proceedings
Subpart 3—Offences by bankrupt
Indictable offences
419 Offences in relation to debts
420 Offences in relation to property
421 Offence in relation to written statement to creditor, etc
422 Offence in relation to documents, etc
423 Offence in relation to fictitious losses or expenses
424 Offences in relation to credit, etc
425 Offences in relation to obtaining consent of creditors
426 Offence in relation to leaving New Zealand
427 Defence of absence of intent
428 Penalties for indictable offences by bankrupt
Offences in relation to record of transactions
429 Failure to keep and preserve proper record of transactions
430 Failure to keep proper records with intent to conceal
431 Penalties for offences relating to records
432 When bankrupt deemed not to have kept or preserved proper record
Summary offences
433 Summary offences
434 Defences to summary offences of obtaining credit
435 Penalty for summary offences by bankrupt
Offences in relation to management of companies
436 Offence by bankrupt in relation to management of companies
437 Penalties for offence in relation to management of companies
Assignee's discretion to prosecute
438 Assignee may prosecute if reasonable grounds certified by Crown Solicitor
439 Assignee has immunity for prosecution if certificate given by Crown Solicitor
Subpart 4—Miscellaneous provisions
440 False or misleading statements or refusal to answer questions
441 Regulations
442 Rules
443 Repeal and revocation
444 Transitional provisions
445 Consequential amendments to other enactments
445A Act subject to application of Cape Town Convention and Aircraft Protocol
Subpart 5—Public registers
446 Subpart applies to public register maintained under section 62, 354 or 368
447 When public register must be accessible
448 Purposes of public registers
449 General information that must be held in public registers
449A Information kept indefinitely on public register after multiple insolvency events
450 Restricted information that may be held in public register maintained under section 62
451 When Assignee may omit, remove, restrict access to, or amend, information contained in public registers
452 Search of public registers
453 Search criteria
454 Search purposes
455 Information contained in public registers may be used for statistical or research purposes
456 When search breaches information privacy principle
457 Crown and Assignee not liable for act or omission
Schedule 1
Assignee's general powers
Schedule 2
Consequential amendments to other enactments
Insolvency Amendment Act 2009
Reprint notes