Summary Instalment Order System

Press, Volume CIV, Issue 30899, 4 November 1965, Page 12

Summary Instalment Order System

(New Zealand Press Association)

WELLINGTON, November 2.

Wage-earners who for some reason find their debts getting out of hand may in future be able to have recourse to a system of summary instalment orders.

A special sevenclause section, included in the Insolvency Bill introduced just before the session ended has been drafted to deal with small noncommercial insolvents and to rationalise present Magistrate’s Court judgment summons orders proceedings.

The Attorney-General (Mr Hanan) said that in cases where small wage-eaners became involved in mounting debt, there was evidence to suggest that they become apathetic and either went to prison on a committal warrant or filed in bankruptcy. “In either case, the debtor has little incentive to attempt to pay off his debts. “Thus, the purpose of this scheme is to benefit both debtors and creditors.” The bill declares that a Magistrate’s Court may make an order for administration of the estate of any debtor where he is unable to pay his debts immediately and alleges that his total unsecured debts are no more than £3OO. The summary instalment order may provide for the payment of the debts by instalments and either in full or to such an extent as the court considers practicable. Payment will be subject to any conditions placed by the court on future earnings and income and disposal of the debtor's goods. Court registrars must notify any such orders to creditors and specify steps to be taken to prove debts.

Claims for debts incurred after the making of a summary instalment order will be deferred until prior creditors have been paid in full. Once an order has been made, it will not be possible to bring or continue proceedings relating to any debt included in the order or notified to the court registrar without special court leave. Magistrate’s Courts are directed to stay such proceedings where they have notice of the order.

Money paid by the debtor under an order will go first in satisfaction of administration costs and then in liquidation -of debts. Unless they can prove to the contrary, debtors defaulting on payment of any sum due under an order will be deemed to have had means to do so, but to have refused to make the payment.

Failure to make payment as prescribed in an order will also allow the issue of commencement of other proceedings, including those for imprisonment for debt.

Those who have recourse to the summary instalment system will not, while liable to payments under an order, be allowed to obtain credit for more than £lO without informing the lender of the order. To do otherwise will itself, make, the debtor liable for imprisonment for up to three months.

Detailed rules for the system are authorised in the bill.