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Debitura specializes in debt recovery services in New Zealand. Our team of skilled professionals provides a wide range of debt management services, including accounts receivables management, debt collection notices, pre-legal and legal debt collection, and enforcement court proceedings. We have extensive knowledge of New Zealand's debt collection laws and regulations, and thus, we offer effective and efficient solutions that help businesses recover their unpaid debts.
We provide unwavering assistance from the beginning until the end.
Tailored collection approach.
Over 500 specialists available for debt collection on an international level.
Our debt collection services boast a success rate of 87%, all while remaining the most cost-efficient option for our clients.
The ultimate guide about debt collection in New Zealand
Do you have money that someone else owes you from New Zealand? We can help you get it back! We have helped hundreds of other businesses get money back that people owed them from New Zealand.
When you use a collection agency, it is easier to get your money back from the person who owes you money. The agency will know the laws and customs of the country where the debtor lives. This will make it easier to get your money back.
If you want to learn how to collect debt yourself, keep reading this guide. It will give you a good understanding of the process from start to finish. If you would rather work with a law firm that specializes in debt recovery in New Zealand, we can help you with that too.
At Debitura, we provide a simple way to collect your debt in New Zealand and +192 other countries. To get started, upload your claim. Within 24 hours, we will assess your case and provide you with 3 free quotes from local debt collection lawyers in New Zealand. We use technology to help us manage our contacts with people. This way, we can get the results we need while still keeping good relationships with our customers. We also have a network of people who help us with things like debt collection, legal work, and getting supplies. We value all of these relationships because they help us get things done.
Initiate debt collection in New Zealand today at no charge. Formulate a gratis profile and submit your case within a span of 2 minutes.
Our debt collection process involves attempting to recover your claim through our successful pre-legal recovery system for the initial 3 months. We offer a 100% no-win-no-fee option.
If your debt is still unpaid during the pre-legal stage, we can offer you 3 quotes from our nearby debt collection lawyers.
You get access to our online portal where you can track your case in real-time
Introduction to collecting debt in New Zealand
If you have debt in New Zealand, we can help you get paid by your New Zealander customers. The person who owes the debt is called the debtor, and the person who issued the debt or invoice is called the creditor. If the original creditor collects the debt himself, this is called first-party collection. If the creditor outsources the collection process to a third party, this is called third-party collections.
- In New Zealand, if you do not pay your bills on time, the amount of interest and collection costs that you have to pay depends on what the court decides.
- Courts are usually good at making decisions quickly. But it is always a better idea to try to solve the problem without going to court. In fact, you should try this as soon as possible. If you wait too long, the person you owe money to might not have any money left. This will make it harder for you to get your money back.
Days Sales Outstanding (DSO)
In New Zealand, people usually pay for things within 30 days. But sometimes it takes up to 15 days longer if the contract is not secure. For listed companies, it takes even longer and has been getting longer over the past few years.
Common payment types in New Zealand
The most common payment methods are:
EFT and Swift bank transfers are becoming more popular because they are fast, secure, and have a lot of support. For export transactions, there should be insurance in case something goes wrong. Allianz Trade has a network that monitors the financial well-being of customers and gives them a credit limit.
There are other ways to guarantee that someone can pay you back besides a down payment. One way is called a standby letter of credit, where a bank guarantees that the person can pay you back. Another way is an irrevocable and confirmed documentary letter of credit, where the person guarantees that they will have the money available to pay you once certain terms have been met. You could negotiate a down payment, but it might be seen as lack of trust.
The main types of corporate structures are sole proprietorships, partnerships, limited liability companies (LLCs), and corporations.
Who is responsible for business debts? The legal structures below decide this:
- If you have a small business and you are the only person who works for it, you can be a Sole Proprietor. This means that you are responsible for any money the business owes.
- Partnership - Two or more people may decide to share ownership and responsibilities of a company through Partnerships. This means that the partners may be held responsible for the actions of the other partners. Limited Liability Partnerships may offer limited liability to some of the partners.
- There are two types of companies that the government regulates. Most people like private companies because they don't need a lot of money to start and the people who own them are not responsible for any debts the company gets. Public corporations are used for bigger businesses that want to sell shares. The people who own these shares are not responsible for any debts the company gets. You don't need a lot of money to start a company in New Zealand
- Foreign companies may settle in an area by opening a branch office. This provides no liability limitation. Therefore, local subsidiaries often take the form of Private or Public Companies. Joint Ventures may be incorporated as Companies, but they may also be established through a contract (in which case no incorporation is necessary).
The debt collection process in New Zealand
The debt collection process in New Zealand is usually done in more than one step.
The image below explains our standard process for collecting debt in New Zealand:
1 Upload your claim:
If you want someone to help you get your money back, you will need to find a debt collection partner. You can upload your claim, or request for help, onto their website. If you use Debitura, we will provide you with 3 quotes from local partners in the Oceania country who can help you with your specific case. This is 100% free - there is no catch.
2 Amicable collection:
The collection process typically begins with sending the debtor reminders via email, SMS, letter, and other available communication channels in the specific country. The goal is to get the debtor to pay or acknowledge the debt and start a payment plan. We offer a solution where you only pay a small success fee if we recover your debt. Amicable collections with Debitura are risk-free!
If the person you are owed money from has not paid you after you have talked to them, it is time to look at what to do next. We will look at how much money you are owed, the chance of getting paid, and other things to help you decide what to do. There are three typical next steps:
If the amount of money you are owed is below 2,000-5,000 Euros, it might not be worth it to take any more legal action. In this case, we recommend "debt surveillance." This means that we will keep trying to contact the person who owes you money and try to reach an agreement about how much they will pay you back.
B: Legal collections:
If you have a big problem that you want to solve through the legal system, it's a good idea to start a legal case. The steps you will have to take will vary depending on the specifics of your situation. But in general, it will take around 1-1.5 years to finish the legal case.
C: Debt enforcement:
If the person you are trying to get money from has said that they owe you money, or if there is a court order, you can go to the bailiff's court to get your money.
At Debitura, we can help you with all three steps in New Zealand.
Amicable collection in New Zealand
At Debitura, we offer a 100% risk-free and efficient process for Amicable collections. This means that you can submit your claim to us, and we will get started within 24 hours.
We will try to contact your debtor through different channels in New Zealand. This might include e-mail, SMS, letters, calls and social media.
The goal of this process is to:
A) Get the person who owes you money to pay the full amount.
B) Get the person who owes you money to agree that they owe you money and start a plan to pay it back.
If the person you think owes you money says they do not owe you money, you cannot try to work it out amicably. You must start with legal collections.
Late payment interest
If someone does not pay on time, the court may choose to give them interest. This would start from the time the person owed the money. The rate would be based on what the court decides. People usually don't do this, but sometimes people agree in their contract how much interest someone should get if they don't pay on time.
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amicable debt collection
Upload your claim and get started with our 100% no-cure-no-pay collection solution.
Legal collection in New Zealand
If the other person has not paid you back or if they disagree that they owe you money, we will give you 3 free quotes from our local debt collection attorneys. In the legal phase, our local attorney will talk to your debtor and try to work out a payment plan. Our partners can also go to court and get a payment order through the legal system in New Zealand. This payment order can then be used to enforce your claim through enforcement court.
Before going to court, the people involved can try to solve the problem using a simpler process at the Disputes Tribunal. This is only if the claim is approximately EUR 12,000. This can be more efficient than going to district court because it is informal and confidential. A referee decides what happens instead of a judge. The decision of the referee is final, but there are some limited circumstances where people can appeal the decision.
If you can't agree on what is owed, you can start a legal case. Someone owes you money, and you have to go to court. The court will help you try to reach an agreement before the case goes any further. If people can't agree on something, the judge will try to help them settle the dispute. But if they still can't agree, the court may have to have a formal hearing.
The courts typically award remedies in the form of equitable compensation, damages, specific performance, attachment orders (i.e. freezing and seizure), declarations (of a right, of the law, etc.), as well as mandatory and prohibitory injunctions. Punitive damages may be awarded although they remain rare in practice.
New Zealand is a country that is part of the Commonwealth. This means that Queen Elizabeth II is the head of state. The country's legal system is based on British law. This means that it follows common law principles, equity, and statutes.
The judiciary system is divided into 58 District Courts, specialized courts, and a High Court. The District Courts deal with all civil disputes approx. EUR 210,000. The specialized courts deal with employment and environment-related disputes. The High Court deals with large business claims in first instance and as a Court of Appeal in certain non-business-related matters. The Court of Appeal hears cases that people bring against decisions made by the District Court or the High Court. The Supreme Court is the court that reviews decisions made by the Court of Appeal, but only if someone has asked for permission to appeal the decision.
The amount of money you will need to pay a lawyer depends on how big and complicated your case is. To get the best price, it is a good idea to ask more than one lawyer for their price. You can do this easily by using Debitura.
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legal debt collection
Upload your claim and get 3 FREE quotes from our local collection partners.
Debt enforcement in New Zealand
If you have proof that the person you are trying to get money from owes you money, you can go to court in New Zealand to try and get your money.
A judgment is final when there are no more places to appeal. If the person who owes money does not pay, it is possible to go to the High Court. But the court will normally ask that the debtor’s financial situation is examined first, or that its assets be seized and sold. Garnishee Orders are also available which get payment from third parties who owe money to the debtor.
The process and how much it will cost vary depending on your situation. You can upload your case to Debitura to get 3 different quotes within 24 hours.
Get started with
Upload your claim and get 3 FREE quotes from our local collection partners.
Insolvency proceedings in New Zealand
The final stage you can initiate if your debtor cannot pay his debts is an insolvency procedure. The goal of this procedure is to sell the debtor's assets and give the money to the creditors following the debt priorities.
- Statutory Compromise: an out-of-court proceeding that may be conducted in order to reach a compromise, but all creditors would need to agree and execute a Deed so that only one creditor could overturn such an arrangement
- Voluntary Administration: a relatively new rehabilitation scheme in New Zealand that consists of negotiating a debt resettlement (or write-off) with creditors of order to allow continuation when the core business is still viable
- Liquidation: may be commenced upon demand of both the debtor (voluntary liquidation) and creditors (mandatory liquidation); proceeds are distributed to the creditors according to their respective pre- insolvency entitlements; liquidators are usually entitled to request the court to cancel certain transactions concluded prior to the insolvency proceedings
- Receivership proceedings: may be set up in order to realize the rights of certain secured creditors (with a debenture containing the terms of a loan to the company and defining the assets which secure the loan) over specific assets of the debtor company.
Our analysis concludes that the risk of doing business in New Zealand is low. Based on this low score, You can feel reasonably confident that you will be able to get paid when trading with customers in New Zealand. Nonetheless, we always recommend doing a specific credit analysis on an individual customer basis before offering any credit. The low risk score is based on the following factors:
The economic risk in New Zealand
Economic risk in New Zealand is very low (1 out of 6). An economic risk of 1 out of 6 is low in Oceanic.
GDP and economic growth are critical drivers for economic risk.
The GDP of New Zealand is 249,99 bn. USD (2021), growing by 4,65% per year.
In terms of the size of its economy, New Zealand ranks #47 out of 183 countries and has a medium-sized economy.
In terms of growth rate, it is ranked #86 out of 183 countries and is therefore considered an excellent growing economy.
GDP per capita is 48802 USD, ranking New Zealand number #21 out of 183 countries. This means the purchasing power of citizens in New Zealand is high compared to the rest of the world.
You can see a more detailed picture of GDP and economic growth in New Zealand in the table below:
Another significant influencer for the economic risk score is the inflation rate and the interest rates. You can see a more detailed picture of monetary key performance indicators in New Zealand in the table below:
The inflation in New Zealand was 3,9% in 2021 which is considered a low inflation rate.
The business environment risk in New Zealand
Our analysis shows that the business environment risk in New Zealand is very low (1 out of 6), which is a low risk score in Oceanic.
The business environment risk are determined by the level of economic freedom and rights in a country. Take a look at the important facts for New Zealand in the table below:
As you can see above, the property rights index is 91 in New Zealand, which is considered good in Oceanic.
The business freedom index is based on 10 indicators, using data from the World Bank’s Doing Business study. The Index is 90 in New Zealand, a good score for a country in Oceanic.
New Zealand's overall economic freedom index is 84 out of 100 and is based on factors such as the rule of law, regulatory efficiency, and market openness.
The political risk in New Zealand
The political risk in New Zealand is very low, with a score of 1/6. This is a low political risk score in Oceanic.
The governance and political stability indicators are critical drivers for political risk. An overview of New Zealand can be seen in the data below:
The rule of law index analyses to which extent agents have confidence in and abide by the rules of society, in particular the quality of contract enforcement, property rights, the quality of the courts, and the police's ability to enforce court orders.
When doing business in a country, the rule of law index is critical as it describes your ability to enforce commercial contracts.
In New Zealand, the rule of law index is at 1,82 points, with the score going from -2.5 (weak) to 2.5 (strong). New Zealand has, therefore, a very high rule of law index, which means you have a very good chance of enforcing your contracts. If your individual customers have good creditworthiness, you should therefore feel relatively safe when providing credit.
Other drivers for the very low political risks are the very strong control of corruption, the strong political stability index, and the small shadow economy that is 8,97% of New Zealand's GDP.
The commercial risk in New Zealand
In New Zealand, the commercial risk score is 1/4, which in our model is a very low score. This very low commercial risk score is low compared to the average in Oceanic.
The commercial risk is relying on a country's international trade relationships. You can see some of the key facts for New Zealand in the table below:
New Zealand has a foreign exchange reserve of 16.11 bn. USD.
The financing risk in New Zealand
We have calculated the financing risk to be 1/4, which equals a very low risk. A very low financing risk score is low for countries in Oceanic.
The country's banking system, efficiency, and stability influence the financing risk. Additional facts and info can be found for New Zealand in the table below:
In New Zealand, the credit information sharing index is 8 on a scale from 0 (low) to 8 (high). This means the accessibility and quality of credit information available in New Zealand is high.
This makes it easy for you to understand the credit risk of your counterpart in New Zealand. You should therefore be able to find a good local credit rating agency that can help you analyse the creditworthiness of your specific customers.
Your juridical rights as a creditor are 12 out of 12 and, therefore, very strong.
Debt Collection in New Zealand: Frequently Asked Questions (FAQ)
In New Zealand, debt collection usually involves multiple steps, starting with sending reminders via email, SMS, letter or other channels to the debtor. If the debtor doesn't pay or acknowledge the debt, there are various options, including debt surveillance, legal collections, and debt enforcement through the bailiff's court. The amount of interest and collection costs that the debtor needs to pay depends on the court decision. It's advisable to try to solve the issue amicably to avoid going to court. Payment methods in New Zealand include EFT and Swift bank transfers, standby letter of credit, and irrevocable and confirmed documentary letter of credit.
The debt collection process in New Zealand usually involves three steps: pre-legal collection, legal debt collection, and debt enforcement. Pre-legal collection includes sending reminders to the debtor through various communication channels. Legal collections involve starting a legal case that typically takes 1-1.5 years to complete. Debt enforcement involves going to the bailiff's court to collect your money. At Debitura, we can help you with all three steps in New Zealand.
In New Zealand, if a debt is disputed, a civil lawsuit is necessary. Legal actions may include debt enforcement and insolvency proceedings, which require a local lawyer. The legal system in New Zealand is based on British law, and has 58 District Courts, specialized courts, and a High Court, as well as a Court of Appeal and Supreme Court. Insolvency proceedings can include voluntary administration, liquidation, and receivership proceedings. To get the best price when hiring a lawyer, it's a good idea to ask for multiple quotes, which can be easily done using Debitura.
Debt collection costs in New Zealand vary depending on your case. Debitura offers a no-cure-no-pay model for pre-legal collection with a success fee between 10-20%. Legal action prices also vary based on your specific case and desired actions. As a solution, Debitura can provide you with 3 quotes from the best debt collection lawyers in New Zealand.
The length of a debt collection process in New Zealand can vary depending on the case and debtor. If the case is solved during the pre-legal phase, it usually takes 3-6 months. However, if legal action is necessary, it could take 12-18 months to collect the debt. The duration will depend on the complexity of the case and the debtor's willingness to cooperate.