Debt Collection in New Zealand

Debt collection in New Zealand can take place amicably or enforced by a court order. Regardless of your collection route, our lawyers in New Zealand can assist you with debt recovery.

Quick Facts
Applicable law	The Credit Contracts and Consumer Finance Act, The Fair Trading Act, The Privacy Act, etc.
Other specific regulations that apply	Yes, on a case-by-case basis.
Types of debts that can be recovered in New Zealand	Individual and business debts
Recovery period	Most debts can be legally recovered during a six-year period from the date of the act or omission on which the claim is based; a written acknowledgment or part payment restarts the period.
Court proceedings	The creditor can collect civil debt via court proceedings.
When to commence court debt collection	Usually after the attempt to collect the debt using amicable practices
The Court in charge of debt collection in New Zealand	The Disputes Tribunal or the District Court in most cases
Number of debts recovery tribunals	Three first instance courts for general debt recovery
Debt collection court proceedings duration in New Zealand	Several months
Amicable debt collection option	Recommended if possible
Amicable debt collection duration	Usually faster than court collection
Foreign court debt collection order recognition	According to the Reciprocal Enforcement of Judgments Act and other provisions, as may apply on a case-by-case basis.
Debt collection agency use	Not mandatory, but recommended
Services offered by a debt collection agency	Amicable and court debt collection, customer-focused services that may allow for a certain degree of flexibility.
Legal representation for debt collection	Our lawyers in New Zealand can assist both creditors and debtors in debt collection and enforcement cases.

When is debt collection used in New Zealand?

When creditors move forward with claiming their overdue payments from various sources. Natural or legal persons who do not honour their due payments may be subject to repossession or debt collection, and in both cases, they can be assisted by our lawyers in New Zealand.

What are the types of debt collection in New Zealand?

The claimant and the debtor must know that there are two types of debt collection procedures in New Zealand:

amicable;
by court.

Below, our New Zealand lawyers explain the amicable and court procedures of debt recovery.

How can I use amicable debt collection in New Zealand?

Amicable debt recovery implies reaching an agreement without the involvement of a New Zealand court, while the court procedure implies a legal action against the debtor.

For the purpose of reaching an agreement with the creditor, the debtor may negotiate smaller instalments. The creditor is not obliged to agree; however, this may be mutually advantageous as it is in the creditors’ interest to recover their due amounts.

What are the steps for amicable debt collection?

Amicable debt collection in New Zealand includes the following steps:

The claimant must gather all the evidence related to the unpaid debt;
He/ she must then provide a debt collection agency or a law firm with all these documents;
The debt collector will contact the debtor and inform him/ her about the outstanding amount of money;
All the documents showing the unpaid debt will be forwarded to the debtor with the purpose of recovering the money;
An agreement is reached, and the debtor starts paying the money in installments.

We invite you to watch a video about debt collection in NZ:

What are the conditions for court debt collection in New Zealand?

Once the amicable procedure has been concluded without recovering the debt, the claimant has the right to file a petition with a New Zealand court.

During the legal debt collection process in New Zealand, the court will:

Review the case of the claimant and decide on the grounds of recovering the debt;
Analyze all the documents related to the outstanding amount of money;
Dispose the recovery of money from the debtor by issuing a court order;
The claimant is allowed to enforce the court order with the supervision of the court.

What courts handle debt collection in New Zealand?

The party who is submitting a claim to recover a debt can do so in one of the following courts, depending on the amount due:

The Disputes Tribunal, when the amount is up to 60,000$; the Tribunal only sees cases regarding debts that are being disputed;
The District Court, when the amount is up to 350,000$;
The High Court for the recovery of debts over any amount; however, in practice, this is only done for debts higher than 350,000$ because of the costs that come when bringing a case to this court.

What are the steps for court debt collection?

Below, our team presents the general steps for starting a claim with the District Court:

The statement of claim: this document represents the manner in which a debt collection claim is initiated; it includes information about the claim as well as the amount;
Statement of defense: if the debtor disagrees, he has 25 working days to file this statement;
Court order: when the debtor does not submit his defense, the court issues an order for the payment of the owed amount;
Enforcement: once the Court has issued the order, the lender is the one who will enforce it.

Please keep in mind that we can provide assistance each step of the way, should you choose to recover a debt through court.

What are the general rules for New Zealand debt collection?

Consumer protection regulations and specific laws, such as the Fair Trading Act, impose several in-practice guidelines for debt collection. In summary:

Debt collection in New Zealand cannot take place forcefully;
Debt collectors, or a team of attorneys in New Zealand when opting for their assistance, may contact the debtor asking for payment as part of the amicable phase, but only present in person for discussions if agreed upon;
Collectors may not take advantage of any vulnerabilities or disabilities;
In the case of natural persons, their employment or family relationships may not be intentionally destabilised by informing of the debt without the debtor’s consent;
Using or providing false information on the debt is prohibited by law.

How can your New Zealand debt collection lawyers help me?

Our attorneys in New Zealand offer tailored solutions for debt collection, both for corporations and individuals. We can assist with:

Pre-litigation or amicable debt recovery initial phases, such as initial advisory solutions on suitable approaches to your situation (whether you are the one collecting or the one who must make the payment and find more suitable terms);
Drafting the letter of demand for the first-stage collection and the subsequent letters informing the debtor of the intention to take the case to court;
Complete tribunal representation, according to the court proceedings timeline;
Advice and assistance with the post-judgment enforcement steps (such as enforcing the attachment order, the court order that will make it compulsory for the employer to direct a sum from the debtor’s salary towards making the debt payment);
In addition to the above, we also provide legal assistance and representation in cases involving disputed debt.

For assistance in debt collection cases, please contact our law firm in New Zealand.