Debt in Papua New Guinea

A credit agreement normally sets the amount borrowed, repayment dates, interest or other charges, security and the consequences of arrears or default. Formal providers should be checked against the current BPNG list of authorized institutions, which was current to 31 December 2025 in the reviewed material. Money-lending businesses also fall within registration requirements under section 57 of the Anti-Money Laundering and Counter-Terrorist Financing Act 2015. BPNG maintains a separate list of unregistered money-lending entities, so an institution's authorization and registration status should be checked before money is borrowed or paid to it. The Centre for Excellence in Financial Inclusion's National Financial Inclusion Strategy 2023–2027 supports financial literacy and mobile or digital access, with particular attention to women and rural communities. More than 250,000 people had received training under the reported programme, including about 120,000 women. No nationwide standard public debt-counselling service for private debtors was established by the reviewed sources, so practical support is fragmented. A debtor can ask a lender for bilateral restructuring or a settlement, but the reviewed sources do not establish a general statutory moratorium that automatically stops all creditor action. An electronic funds transfer complaint follows a separate payment-service process: the institution should provide a complaint procedure and clarify the matter promptly where possible, otherwise provide information within 15 days and complete the process within a maximum of 30 days. That directive concerns payment services and does not automatically resolve a dispute about the underlying loan. A creditor can pursue civil recovery through the District Court or National Court according to jurisdiction. National Court civil claims are filed through the Registry and require the applicable filing fee. After judgment, the Sheriff can serve documents for a fee and use enforcement instruments such as a writ of levy, writ of possession, writ of delivery or writ of sequestration. A District Court warrant of execution may also apply. Enforcement generally continues unless the creditor instructs the enforcement office to stop it. The National Courts have regional Sheriff offices, but practical access and timing depend on the court, location, documents and fees. Papua New Guinea has an established formal insolvency pathway under the Insolvency Act 1951. Insolvency means that a debtor cannot meet debts in the manner required by law. Proceedings begin with a petition filed in the National Court Registry. A debtor may petition personally using Form 1 with the required signature and attestation. A creditor may petition when the statutory conditions are met, including a liquidated debt that is due and remains unpaid. The reviewed provisions state thresholds of at least K100 for one creditor, K140 for two creditors and K200 for three or more creditors. A secured creditor generally needs to give up or transfer the relevant security rights before relying on this petition process. Acts of insolvency include a declaration of inability to pay, a debtor's own petition, certain fraudulent transfers and an execution seizure of at least K100 that is not satisfied within four days. The Act treats an act of insolvency as usable only within six months before the petition. Because the Act is more than five decades old and a 2026 review identified outdated terminology, amounts, rates and timeframes, current Rules and Registry practice should be checked before relying on these figures. After adjudication, property available for distribution is dealt with for the benefit of creditors according to proved debts. In a creditor petition, property initially vests in the official trustee. In a debtor petition, the official trustee takes possession of the property until adjudication or dismissal. An official trustee is the trustee appointed under the Act; creditors may also elect a trustee in the situations allowed by the procedure. Provable debts include present or future liabilities and certain contingent liabilities that meet the statutory conditions. Secured creditors retain their security rights. The Court may stay other actions or enforcement, while the trustee can secure and sell property, examine proofs of debt, pay dividends and administer settlements or compositions. The debtor must disclose assets and debts fully, hand over books and documents and answer questions during the statutory process. The debtor may have to attend and answer at a creditor meeting for liquidation by arrangement, and the Court may require examination on oath. Refusing to answer can be an offence punishable by up to six months. A debtor can challenge an act or decision of the trustee. An allowance for the maintenance of the insolvent debtor or family may be paid from the estate with the required creditor or committee consent. Creditors prove claims by affidavit before the Registrar, a Justice or a Commissioner, and late proof can be possible under the Act. A debtor who cannot pay may summon a general creditor meeting. A special resolution can create a liquidation by arrangement, with a trustee and a statement of assets and debts; the resolution and statement are filed with the Registrar and the liquidation begins when the trustee is appointed. During insolvency, creditors can also approve a composition or scheme of settlement by special resolution, subject to Court or Judge approval. These procedures can differ from ordinary enforcement and should be assessed against the debtor's assets, creditors and ability to fund a settlement. Costs depend on the procedure. A creditor generally bears proceedings costs up to adjudication, while insolvency costs, charges and expenses are paid from the estate where the Act provides. Trustee remuneration may be determined by creditors. Court enforcement requires filing fees, and service by the Sheriff also carries a fee. The Office of the Public Solicitor provides free legal aid to people who cannot afford a private practitioner, including civil matters, but eligibility and practical coverage depend on means, merits and available capacity. The reviewed sources do not establish one universal duration from filing to completion. Proceedings may close after property is realized without needless delay or after a composition or arrangement is completed, followed by publication of the closing order in the National Gazette. A certificate of discharge releases provable debts subject to statutory exceptions. Section 132 allows discharge after the last examination, or earlier with the required special-resolution consent where the statutory conditions are met. Section 133 provides a process after 12 months with written consent from the majority of proved creditors whose debts are at least K20 each, or after two years without creditor consent. Section 134 provides a process after three years with the required written majority consent and an oath confirming full and fair discovery, without collusion. The Court may suspend or condition a discharge, and the certificate takes effect after the appeal period or after an appeal is decided. State or public-revenue debts are not released unless the Finance Secretary and Minister give written consent. Fraud or breach-of-trust liabilities, sums retained by the trustee and obligations of a joint debtor, partner or co-obligor also remain outside the ordinary release. An undischarged insolvent person generally cannot have provable debt enforced against property until three years after closure. After that period, an unpaid balance becomes enforceable in the manner of a judgment debt only with Court consent and does not automatically accrue interim interest. Public debt recorded by BPNG's Quarterly Economic Bulletin or the Department of Treasury concerns sovereign debt management and is not a remedy for a private debtor.