What is a Summary Instalment Order (SIO)?
Debt can completely swamp your lifestyle and, on top of that – there are several confusing terms that make it hard to understand the options when you reach out for a helping hand.
One term that even confuses the professionals, including lawyers and accountants is summary instalment order (SIO), also known as a debt repayment order to further confuse.
Businesses and organisations you owe money to may be supportive of giving you time to repay your debt when you have an official debt repayment plan and you have appointed an SIO supervisor.
Usually, the repayment period would be three years, but this can change according to your financial and personal circumstances.
At Debtfix, Christine Liggins is an approved SIO supervisor and you can see her official New Zealand Insolvency and Trustee Service online.
If a SIO plan (debt repayment plan) does look like the best option to get your debt sorted and you have a supervisor, the next step is to make an application to the New Zealand Insolvency and Trustee Service.
This can be done online, and at Debtfix we work through this with you.
There will also be an official assignee, who is a Government official who oversees the management of SIOs.
Am I eligible for a summary instalment order (SIO)?
To be eligible for an SIO you must have some form of income or earnings.
So, if you are working – that is a good start.
The next critical factor to determine your eligibility for a SIO, is that you have less than $47,000 of unsecured debt.
This is money you owe to organisations and they can’t use the sale of assets, such as your home or car, to repay the loan.
Good examples of this could be personal loans, credit card debt and cash loans from fast money lenders.
When is a summary instalment order (SIO) not a good option?
If your debt is only secured, that is a home mortgage or vehicle loan a SIO is not appropriate.
Other debt including student loans, fines, penalties and reparation orders cannot be included in a debt repayment order, which means you would have to plan how to repay these as well as other loans.
If your debt is more than $47,000 it may be more appropriate for you to consider a creditors’ proposal, with bankruptcy being the absolute last option.
At Debtfix we consider all options because becoming bankrupt is not an easy solution and often, a creditors proposal is a better solution than bankruptcy.
What information is required for a summary instalment order (SIO)?
When making an application for a debt repayment plan (or SIO) the Insolvency and Trustee Service will require you to provide details about your identity, including your given name and any other names you use.
Other personal details required will include your partner’s details, places you have lived and where you currently live, your Inland Revenue (IR) number, passport details and employment details.
They will also need your accountant’s or solicitor’s details, if you have either of these.
Extensive details about your financial situation are needed, including what assets you have that are worth more than $5,000, superannuation schemes you have and KiwiSaver details, shares, investments, life insurance policies and more.
The full disclosure of your debt needs to be established as well as businesses you are involved in, family trusts, partnerships and any debt they may have.
Is a summary instalment order (SIO) application always approved?
Your SIO application is submitted to the Government official assignee and not every application for a debt repayment order is approved.
Applicants can request a review and it is important to have independent advice before making a new application.
Debtfix will help you with this.
What happens when a SIO is approved?
The great thing about having a debt repayment order or SIO approved, is that organisations you owe money to (creditors) that are included in the plan will stop chasing you for repayments.
If a creditor included in the SIO, does keep approaching you for payments, you can tell them to contact your SIO supervisor.
If the lender is not included in the SIO then you need to make arrangements to repay them and they can keep contacting you for repayment of the debt.
You should give these organisations your SIO supervisor details, so they can file a claim against your estate.
Will people know I have a SIO?
Once a debt repayment order is approved your name will be included on the New Zealand Insolvency and Trustee website, where people can search for your name.
Organisations you owe money to that are included in the order will be contacted.
You need to contact organisations where you have secured debts, such as a bank that has a mortgage over your house, and make arrangements for payments or repossession or sale of assets.
You have an obligation to make the payments required in the debt repayment order and if you fail to do this your SIO supervisor needs to notify the Government official assignee.
Finally, if your circumstances change you may need to review the SIO. Your supervisor can work through this with you.
If you want advice or information about a SIO or debt repayment order, contact Christine Liggins, an approved SIO supervisor or the crew at Debtfix.
