News & Thinking

Is 2024 going to be “the insolvency year”?

Contributed by:

Chloe Jolliffe

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Chloe Jolliffe

Most professionals in the insolvency world would agree that the effects of Covid have been slow to make an impact in our area.

Indeed, during the “Covid years” of mid-2020 to -late 2022, New Zealand experienced very low insolvency numbers. It appears that creditors have undertaken best endeavours to work with their customers where possible, to ride out any difficulties that have been faced because of Covid.

However, there have been several debtors that were in trouble pre-Covid, and their situations have not improved, despite leniency from creditors.

Analysis shows that the numbers have been relatively low and steady in 2021 and 2022 and that there’s been an increase in 2023, which we are expecting to continue into 2024.

Company liquidations

A company may be placed into liquidation generally by its shareholders, or the Court. This often occurs when the company is unable to pay its debts. A third-party liquidator is appointed generally to sell down the unsecured assets of a company to recover amounts owing to its creditors.

New Zealand has seen an increase in liquidation numbers, and statistics recorded by the New Zealand Companies Office show there have been 6213 company liquidations between January 2020 and December 2023 (inclusive).


Bankruptcy is a personal insolvency procedure. Where a party is unable to pay their debts, they are insolvent and may be adjudicated bankrupt by the Court (on the application of a creditor – a creditor application), or by their own application (debtor application).

On bankruptcy, the individual’s assets vest in the Official Assignee, who administers the bankrupt’s estate with the view of realising any assets to meet the debts of the bankrupt. The Insolvency Act 2006 governs the bankruptcy process in New Zealand.

Bankruptcy generally lasts three years and, once discharged from bankruptcy, an individual will be able to “start again” free of their pre-bankruptcy debts.

Creditor Applications

During the last three years, we have seen a fall in bankruptcy numbers with creditors withholding action. However, 2023 did see an increase in creditor’s applications and, according to New Zealand Insolvency and Trustee service, there have been 890 bankruptcies through creditor applications between January 2020 and December 2023.

Debtor Applications

According to New Zealand Insolvency and Trustee service there have been 1723 bankruptcies through debtor applications.

Receiverships in the years 2022 and 2023

If a company or a person is unable to pay its debts, and it has granted a creditor security over its/their assets, the creditor (known as a secured creditor), can appoint a receiver with the view of realising the secured assets to pay down the secured creditor.

A receiver may trade the business of the applicable company, rather than simply shutting it down. The receiver focuses on realising funds for the creditor that appointed them.

In 2023, we saw the number of receiverships increase to a similar level as 2020, with statistics recorded by the New Zealand Companies Office showing there have been 352 receiverships between January 2020 and December 2023.

How we can help

Our team has significant experience with insolvency processes and is able to provide you with any guidance or assistance that you need should you be in a position of needing to recover a debt owed to you or if you are facing challenges with meeting amounts that you owe.

For confidential discussion on insolvency processes and your options, get in touch with Chloe Jolliffe.

Thanks to Summer Clerk, Etienne Harrington-Watt, for his assistance with the preparation of this article.