Like many fields in finance and business, insolvency comes with its fair share of jargon. Our goal here is to decipher the 'official' terminology and present it in plain English. Below, you'll find explanations for various terms, with key concepts highlighted in bold.

Please be aware that this glossary serves as general guidance only. The provided definitions and explanations are not exhaustive summaries of the law.

Glossary of terms




A resource of value that is owned by an individual, company, or organisation


Formal insolvency process for individuals

Companies Act 1993

The legislation regulating companies in NZ, including but not limited to all liquidations and voluntary administrations

Corporate Insolvency

The inability of a company to pay its debts which may lead to:

  • A creditors’ compromise
  • Receivership
  • Voluntary administration
  •  Liquidation
  • Statutory management

An individual, company, or organisation which is owed money by another person, company, or organisation


Amount of money owed by an individual, company, or organisation that is expected to be repaid


An individual, company, or organisation who owes money to another person or organisation

DOCA Deed of Company Arrangement
General Security Agreement (GSA) / Interest An interest over all of a debtor’s present and after-acquired assets
Insolvency Act 2006

The legislation regulating personal insolvencies in New Zealand


When a company or individual is unable to pay its debts as they fall due

Licensed Insolvency Practitioner (LIP)

A regulated individual who provides advice and solutions to financially distressed companies or individuals and may be appointed as a liquidator, voluntary administrator, or receiver.


The process of shutting down the company’s operations and selling its assets to repay creditors


A LIP appointed to oversee the liquidation process and distribute money (if any) to creditors


Ministry of Business Innovation and Employment

Official Assignee

The Government officer that administers all personal insolvencies (bankruptcies) in New Zealand

Preferential creditor

An unsecured creditor who enjoys a special priority under Schedule 7 of the Companies Act 1993


An online register that records information about a  security interest granted by a debtor to a creditor. It is legislated by the Personal Property Securities Act 1999.
Personal Property Securities Register | PPS Register (


The process of selling assets and recovering money


A LIP appointed by a secured creditor or the Court to receive and manage property owned by an individual, company, or organisation


The act of obtaining or regaining assets that were lost, stolen, owed, or taken


The process of making significant changes to a company’s financial, operational, and/or organisational structure to improve its viability and performance


Restructuring Insolvency & Turnaround Association of New Zealand

Secured creditor

A creditor who has a legal claim to specific assets of the debtor for debt owed


 A right granted by a debtor to a creditor over an asset or other collateral to secure an obligation owed by the debtor to the creditor

Statutory management

A process designed to deal with complex corporate or individual business failure

Trade creditor

An individual, company, or organisation that is owed money for goods or services provided in the day-to-day operations of a company

Unsecured creditor

A creditor who is owed money by debtor, but who does not have any specific rights to the assets of the debtor

Voluntary administration

Type of insolvency process that is designed to give companies a chance to restructure and negotiate terms with their creditors with a view to maximising returns to creditors and preserving company value whilst avoiding liquidation. The process of negotiation with creditors could result in a Deed of Company Arrangement (DOCA) that outlines how the company will pay its debts.

Voluntary liquidation

A type of liquidation process initiated by shareholders of a company.

Winding up

Refer to liquidation

This website uses cookies to provide you with a great user experience. By using our website you consent to all cookies in accordance with our Privacy Statement & Cookie Policy.