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If you are in danger of becoming insolvent, it can be challenging to formulate a plan for dealing with it. This is especially true if you run a business, and you are unsure whether you can be liable personally for debts incurred by your business. It can be useful to know what options are available to you if you become insolvent and who oversees repaying your debt. In New Zealand, the Official Assignee is in charge of insolvency procedures. This article will explain who they are and what they do.

What Is the Official Assignee?

The Official Assignee’s Office is a government organisation that deals with insolvency. It is also called the Insolvency and Trustee Service (ITS). The Official Assignee’s role is to administer legal proceedings when you (the debtor) are insolvent. The Official Assignee acts as a trustee for your property and oversees the debt repayment process. Some things to note about the Assignee:

  • creditors will deal with the Assignee for facilitating debt repayments;
  • the Official Assignee will have access to your potentially sensitive financial information as they need to;
  • there is an application fee to use ITS, and they will take a small percentage of repayment instalments; and
  • ITS does not deal with companies going into receivership – that is a different process.

What Does the Official Assignee Do?

It is the Assignee’s job to administer insolvency proceedings where appropriate. If you are worried about insolvency and wish to begin legal proceedings, you contact ITS to start that process. The extent of the Official Assignee’s involvement in your affairs will depend on the kind of insolvency procedure you are eligible for. However, this depends on what type of debt you have accumulated, and how you can pay it back. You need to determine whether you have:

Your business structure will determine what kind of debt you owe, and who is responsible for it.

Business Structure

Nature of Debt

Sole trader:

All debt incurred in business (including tax) is your personal responsibility. So, you would be personally insolvent. There is no legal separation between your business assets and your personal ones.


All partners in your partnership are equally responsible for the business debts. You would be personally insolvent here as well. If you cannot locate the other partners, then you are responsible for all of the debt.


If your company is registered, then the company is responsible for business debt. But if you made any guarantees in your personal capacity, then you would be responsible for those.

Types of Insolvency Procedures

The Official Assignee oversees deciding the best way to deal with your insolvency. All insolvency procedures will affect your credit rating, and you need to inform the Assignee of your income and funds. These are your options if you are insolvent:


If there is no way for you to repay your debts, then you can apply to the Official Assignee for bankruptcy. This relieves your debt but transfers all of your property to the Official Assignee. They then sell off your assets to pay back your creditors.

The Official Assignee has access to your financial and business information so that they can find what they need to repay your creditors.

There are also restrictions regarding what you can do if you are bankrupt. This includes needing:

  • permission from the Official Assignee to travel overseas;
  • to inform ITS if you get a prize or inheritance. They can use it to pay back your debts;
  • the Assignee’s consent to withdraw from Kiwisaver;
  • to inform the Assignee if your spending or income changes;
  • the Assignee’s permission to be in a management position or self-employed;
  • to gain the Assignee’s consent to be employed by a relative; and
  • your right to legal proceedings transfers to the Official Assignee.

You can apply to declare bankruptcy if you owe debt over $1000. It is usually your only option if your debts exceed $50,000. It lasts for three years, and your name goes on a public register.

No Asset Procedure

The Official Assignee can also administer the no asset procedure if you are eligible for it. This procedure does not have the same restrictions as bankruptcy and still clears consumer debt. You can use this procedure if your debts are under $50,000, and you have no property that the Official Assignee could reasonably sell off to pay back your debts (known as realisable assets).

You can only use this procedure once.

Debt Repayment Orders

An Official Assignee can also make a debt repayment order. This kind of procedure means that you still control your:

  • assets
  • income; and
  • spending.

Essentially you devise a debt repayment plan with your creditors, and if they agree, the Official Assignee can set this in motion.

You can only do this with unsecured debt under $50,000.

Key Takeaways

The Official Assignee is part of the Insolvency and Trustee Service, a government organisation responsible for administering insolvency proceedings. If you want to declare bankruptcy, you apply to them, and they can also administer other procedures if appropriate. If you would like more information or help with your insolvency proceedings, contact LegalVision’s insolvency lawyers 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

What is the Official Assignee?

The Official Assignee is a part of Insolvency and Trustee Services (ITS). Their job is to sell you assets and pay back creditors if you declare bankruptcy. They also offer information about insolvency and what procedures are available.

What does insolvency mean?

Insolvency means that you cannot pay your debts when they are due, or your total debt is greater than the sum of your total assets. There are various services to help you deal with this situation, which the Official Assignee at ITS provides.

How do I declare bankruptcy?

You can declare bankruptcy by applying to the Official Assignee’s Office at ITS. You can do this online. It involves applying for an adjudication and filling out a Statement of Affairs. Your creditors can also apply to the High Court to declare you bankrupt.

What happens when I declare bankruptcy?

Your debt is relieved, and you are protected from creditors, but you transfer all of your assets to the Official Assignee. They then sell your assets to pay back your creditors. There are also restrictions regarding what you can do while you are bankrupt.

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