Learn about Summary Instalment Orders

What you need to know

A Summary Instalment Order (SIO) is a formal arrangement between a debtor (you) and your creditors (the people you owe money) that allows you to pay back all, or an agreed part, of your debts by instalments.  SIOs are usually for three years, but where there are special circumstances, five years.

Where a person has assets or income an SIO may be considered as an alternative to bankruptcy.  SIOs provide an opportunity to learn to live on a budget and to manage finances.  These skills may prevent difficult financial positions in the future.

The making of an SIO

What happens when my SIO is made?

Is my SIO published?

What is an SIO supervisor?

What does a supervisor do?

How do I choose a supervisor?

What if my circumstances change during my SIO?

What happens if I do not make the agreed payments?

Is there anything I cannot do during my SIO?

What happens to the money I pay?

When will my SIO end?

The making of an SIO

You or any of your creditors (with your consent) may apply for your entry into an SIO.  The Official Assignee may grant an SIO if:

1. Your total unsecured debts (excluding student loans, fines, penalties, and reparation orders) are less than $NZ40,000
2. You are unable to pay those debts immediately.

Before granting an SIO, the Official Assignee will allow you and your creditors to make representations about the making of the order.

What happens when my SIO is made?

After the Official Assignee makes an SIO:

• Creditors cannot begin or continue proceedings unless the person subject to the SIO fails to meet their SIO obligations
• Any proceedings still in Court must be halted unless the Official Assignee gives permission for the case to proceed.

Creditors who have supplied satisfactory documentary evidence (e.g. invoices and signed agreements) of amounts owed have certain rights.

Creditors can:

• Apply to be included as a creditor in the administration of the SIO for the amount of the debt
• Object to the acceptance or rejection of other creditors’ claims
  
• Apply to the Official Assignee to resolve claim disputes.

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Is my SIO published?

There is a public register of SIOs on the Insolvency and Trustee Service website.  All current SIOs are on the register.  When an SIO ends, the record is removed.  SIOs are not advertised in newspapers or the Government Gazette.

Search the register for SIOs

What is an SIO Supervisor?

SIOs are administered by supervisors.  Contact details of supervisors can be found on our website, or at local support offices such as Citizens Advice Bureau, Budget Advisors or Community Law Centres.

SIO Supervisors have the authority to:

• Supervise compliance with the terms of SIOs and any other orders made by the Official Assignee

• Direct employers to pay all or part of earnings to the Supervisor
  

• Charge fixed or prescribed amounts for carrying out supervisory duties.

What does a Supervisor do?

Duties of SIO Supervisors include:

• Sending notices of SIOs to all known creditors
  

• Providing documentation relating to property, conduct and/or dealings of the person subject to the SIO to the Official Assignee as required.

Where a Supervisor fails to adequately supervise an SIO, the Official Assignee may terminate the appointment and can appoint a replacement Supervisor.

How do I choose a supervisor?

Choose one from the list of current supervisors.

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What if my circumstances change during my SIO?

If a person subject to an SIO has a change in financial circumstances during the period of the SIO, they can apply to the Official Assignee to have the order varied or terminated.  Any of the creditors or the SIO Supervisor may also apply.  The Official Assignee has authority to make decisions regarding variations and terminations.

What happens if I do not make the agreed payments?

Supervisors must notify the Official Assignee as soon as practicable where any payment is not made in accordance with an SIO.  If this happens, the SIO can be terminated and the creditors can start legal proceedings to pursue outstanding debts.  This may lead to bankruptcy.

Is there anything I cannot do during my SIO?

While subject to an SIO it is an offence to raise credit or enter into hire purchase agreements over $NZ1,000 without first disclosing an SIO is currently in place.  To avoid possible misunderstandings, notification to potential lenders should always be in writing.

The penalty for committing this offence is a jail term of one year, a fine of up to $NZ5,000, or both.

What happens to the money I pay?

Supervisors must distribute money paid under SIOs in the following order:

1. Administration costs (including Supervisor’s remuneration) in accordance with a prescribed scale
2. Official Assignee’s costs and fees
3. Debts which have been included in the SIO
4. Any surplus back to the debtor.

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When will my SIO end?

In most circumstances SIOs are discharged after three years, when the agreed terms of the SIO are complete.  In some circumstances an SIO may end earlier, or the Official Assignee may extend the period to five years where special circumstances exist.

Creditors are not able to pursue the balance of any debts after completion of an SIO except for student loans, fines, penalties and reparation orders.

Further information