Does anyone have any recommendations on debt recovery? not used to exercising enforcement for payment of debts.
I'm thinking its easier to send it to a collections agency like baycorp or similar? just wondering if anyone knows who charges affordable rates (if thats even a thing?). Any recommendations gratefully received.
Thanks!
Is small claims the same as disputes tribunal? I heard we can only progress if we have date of birth and physical address for service. is it an easy process?
The disputes tribunal is relatively straight forward with fees from $45 - $180 depending on the value of the debt (up to $30k). Full fee breakdown here.
However, you can only use them if you you have a dispute over a debt. ie the other party disagrees with what you say they owe.
If they simply won't pay then the disputes tribunal will not act as a debt enforcer.
The fees for using a debt collection agency vary, with the big names like Baycorp costing the most.
Local debt collection agencies can be cheaper - I have used Aorangi Debt Collection in Christchurch.
I would suggest having a talk to them or a local company about what it would cost in you circumstances.
Sometimes it is cheaper to just write off the debt and move on rather than spending a fortune chasing someone who won't pay as it can get very expensive. They all charge admin fees just to load the debt, then a % of the debt itself. Personal visits or debt default lodgings will all incur addional costs.
Also keep in mind that once you register a debt with a collection agency they will still take their commission even if the client pays you directly.
If you have a contract with the client that specifies they personally guarantee the debt then you can claim the collection fees as well, however they can just ignore the requests for payment and your only recourse is to go to court.
A debt collection agency can make it easier for you if you don’t want to confront a non payer but they actually have no more rights than you or I when it comes to demanding payment.
Sometimes though just having a letter or phone call from a collection agency can help get your money.
I have had mixed results.
Way up the cost first relative to the debt.
I have made a couple of claims through the Dispute Tribunal (Yes it's the new name for small claims) As bigcheese said you have to word your claim creatively if you are just chasing a debt. You are not meant to use it for that. You have to throw in a few "other party disputes that they owe me any money" or similar.
Yes you also need a physical address for the papers to be served on them. I had to get creative here also last time. I only had an email address. I made up a fake email account with a domain name of a large chocolate company and sent them an email telling them they had won a prize in a competition they entered. And that I needed their address to deliver it.
Thennnnnn even if you win the case the DT can't enforce the payment. You have to go to the next step of appointing baliffs to do that. More paperwork. But winning the case does open it up so you can use them.
smart move re the chocolate. Nobody could resist
Your a legend. Was it Cadbury creme eggs? Haha.
Hi,
Better to try engage smaller collection firms rather than baycorp or the likes, having a large amount of customers they tend to only push collecting the debt while it is fresh and the collectors consider it easy.
I'd say start with small claims court if you havent been through that process already