The Far North District Council will not ask one of its councillors to resign if he is declared bankrupt later this month.
However, Councillor Steven McNally has already quit as chairman of the council's audit and finance committee after accepting the position in August last year on a six-month trial basis.
McNally had warned the council in August that he may face bankruptcy proceedings and councillor Monty Knight will take over as chairman of the audit and finance committee.
FM Custodians, Fund Managers Auckland and Auckland Mortgage Trust were last week given permission to apply to have McNally bankrupted if he did not stump up with $800,000 by February 13.
The application was heard in the High Court at Whangarei after FM Custodians obtained a High Court judgement against McNally of $856,353 in June 2012.