Legal Procedure for
Debt Collection in New Zealand
to get your debts collected for Free
Debt collection starts the day you give your
When you give someone credit you are
effectively lending them your money.
Can you borrow money off a money lender without filling in some
forms or reading their terms and conditions?
No of course you canít.
A money lender will most likely do a credit check on you as
If your customer is slow in paying then you
will also need to be able to pass on to them any collection
costs you may incur in waiting for your money.
Fair Trading Act
We want to collect your debts at the least
possible cost to you.
To do this the Fair Trading Act requires you to disclose to your
customers your Terms of Trade at the time that credit is given.
Your Terms of Trade must include provision for the recovery of
If you do your homework first and
disclose your Terms of Trade to your customer then when we collect
the debt for you we can also insist that your Debtor pays the
Credit Application forms
A credit application form is by far the best
way of disclosing to your customers all of the clauses in your
Terms of Trade. It should cover things like the terms of
repayment, the Privacy Act, Personal Guarantees etc.
These forms are also
available from us under Notices & Forms
Terms of Trade Notice
For those who are unable to provide a credit
application form then the Commerce Commission recommends that you
display a notice in your place of business setting out your
Terms of Trade.
The notice should include a clause stating
that collection fees and or late payment fees may be added to
your customers account if not paid by the due date.
If you donít have one of these notices then
we also supply these under Notices & Forms
Cheque stamps are a must for any business who
accepts a lot of cheques.
These stamps are available from us so that
you can add a collection fee to recover the funds from a bounced
cheque and also get information about the person from their
For cheque stamps supplied
by us see notices & forms
Tradesman Call Cards
Some businesses take orders for work by phone and it is not
to discuss your Terms of Trade over the phone.
To overcome this we have designed a Tradesmanís call card which
discloses the Terms of Trade of the business. The card can be
that can be left on the premises with the job or in the
letterbox at the address where the job was done.
It not only discloses your Terms of Trade but
also acts as an advertising tool when left to inform your
customers of your visit.
They are ideal for jobs where the owner is not present.
These cards are
ideal for tradesmen such as
Plumbers, Electricians, Glaziers, etc.
will specially design these cards to meet your
To make sure our clients are able to get the
paper work right we have designed the appropriate forms and
notices for them.
For a description and prices of
all these valuable
Some people will not respond to requests for
payment and the only means left is to take legal action through
the District Court.
There are several steps involved in the
process and the one most commonly used is termed Notice of
Proceedings. This document together with a Statement of Claim is
drafted and served upon the Defendant.
The Defendant has 30 days to respond or
defend the action and if nothing happens then Judgment by
Default is normally granted.
The Defendant is then summonsed to appear at
an Examination Hearing in the District Court which establishes
their ability to pay.
The Court will normally make an order of how much and when to
In some cases it may be necessary to enforce
the order via the recovery of goods (Distress Warrant),
deduction from wages (Attachment Order) or as a last resort
The Debtor Communications
head office in
association with our Solicitor carries out all of the above
If any of the proceedings are defended then
the file is passed on to the Creditors Solicitor who has the
authority to represent the Creditor in Court.
Most Court fees are recoverable from the Debtor if awarded by
The legal costs and court filing fees are set by the court
and are standard for New Zealand
For a copy of the fees
Many people who find they are unable to pay an account will
often use a dispute to delay payment.
The dispute is often not known to the
Creditor until a
collection agency becomes involved.
We can act as a third party Mediator in the dispute and by
hearing both sides of the story we often get it resolved.
Where agreement cannot be reached then it is best resolved in
the Disputes Tribunal.
The referee in the Tribunal has the power to make a decision
based on the evidence presented. His decision becomes binding in
Filing fees are set by the court and are as follows
For more detailed