Collecting a Commercial Debt
Getting that Money You’re Owed
It can sometimes be frustrating and time consuming to pursue debts owed. Multiple requests for payments are often met with continual promises to pay from debtors, however no money may be received or payment is slow. We therefore explain some effective recovery options in this eBites article for you.
Company Debts
For debtors who are companies, commonly the most effective way to get paid is to issue the debtor company with a Statutory Demand under the Companies Act. Such a formal Demand can be used when the amount owed is $1,000 or more.
In essence, the Demand should outline the amount owed and request payment within 15 working days. Failure to pay or otherwise come to an agreed arrangement means you can apply to the Court for the debtor company to be liquidated. This is something companies usually wish to avoid, so the Demand can be a great recovery tool.
If the debtor company does end up being liquidated, there may be insufficient assets for all creditors. We therefore recommend our clients to obtain personal guarantees from Directors of any company customers. They can then pursue the Director(s) personally to recover what is owed.
Consequently, ensuring your terms of trade and customer credit application forms are up to date and comprehensive can be really beneficial for debt recovery.
Debt owed by an Individual or Business
Where a debt is owed by an individual or a business (that is not a company), or where the debt is owed by a company but the amount owed is under $1,000, you can go to the Disputes Tribunal or the District or High Courts and apply for judgment against the debtor.
The Disputes Tribunal is usually cost effective and quick. It's able to deal with claims up to $15,000. Parties can’t be legally represented at the Tribunal hearing.
For those debts over $15,000 and under $350,000, you can apply to the District Court for judgment against a debtor. For any amount over $350,000 your claim must be filed in the High Court. Both Courts also have the ability to give Summary Judgments which, in contrast to regular court cases, can be faster and less expensive as they don’t require the same level of procedure. We can help in choosing the type of procedure required in any given case.
Once you’ve got a Judgment there are all sorts of ways you can enforce it so as to ensure you get paid. Commonly in cases where a smaller debt is owed, you could apply to have the debtor assessed by the Court as to their financial ability to pay. Orders may be made for instalments to be taken directly from their wages (for an individual). Alternatively, for larger debts, applications to obtain a charge over, or sell, a debtor’s property are available as is an application to make a defaulting individual debtor bankrupt. Like a Statutory Demand, that last option can have devastating consequences for individuals, who usually take all steps possible (such as paying up) to avoid it.
If you want to know more about getting paid or would like further information on how to ensure your terms of trade protect you as creditor, please contact Holly Brown, Senior Solicitor, in our Litigation Team, Ph 03 379 4660.
$50 garden centre vouchers!
Our winners this week have won $50 to spend at a local garden centre.
Congratulations to:
Cassie Arauzo from Cockle Bay
Elizabeth Williams from Hillcrest
Luke Shamy from Hornby
Mitchell Hopping from Wallacetown
Get in touch with our helpdesk team here if you're on this list! If you're not a winner, check back next week just in case.
Kalle
"Sports and travelling run in the family, and that's kind of what's led me to come to New Zealand."
"I grew up in a small town in Finland. My dad was involved with sports all his life, he was a shot putter, discus thrower, powerlifter, we traveled quite a bit when I was a kid. He never mentioned much of the rugby days. He just said he broke both of his shin bones playing rugby, so he said, ‘never play the sport, It's crazy.’
I started playing when I was 18. I played my first cap for the Finnish national team in 2014, we won the Finnish championship with my club. Rugby is not a big thing in Finland.
I moved here to play rugby in 2017. The club that wanted me to come over was Methven Rugby Club. They got me here and they were like, ‘what do you do for work? I’d just finished chef school in Finland. ‘We'll get you a job at Mount Hutt as a chef, you can do that while you play rugby with us.’ I said, ‘Perfect. Yeah, I'm in’.
I've always loved food. My mum was an amazing cook, and still is. When I was studying tourism I worked in some hotels in Finland, and I saw how the chef's worked. I just loved the kitchen vibe and I was like, Yeah, that’d be something I'd love to do.
I've had more of a culinary journey In New Zealand than in Finland. I started at Mount Hutt, after that I worked at The Dubliner in Methven. I worked as a senior pizza chef at Sal’s for maybe six months then worked as chef de partie at Cellar Door. At Eliza's Manor, I worked myself up to a junior sous chef. Then the opportunity came to work my first head chef job at Moon Under Water.
We're privileged to have a busy atmosphere, we can try new things and get a bit creative. There are no TV’s, just come here with your family or with your mates, play board games, to socialise.
I really want to drive the local food and ingredients through the menu. We don't mind spending more for quality ingredients as long as it's supporting New Zealand businesses. We just love to use local. And it's pub food, but I feel like it's elevated.
I play club rugby here for the Christchurch Football Club, the oldest club in New Zealand and I still play regularly for the Finnish national team, whenever they can fly me over to play."
- Kalle
View more stories, or nominate someone: @humansofchch
www.humansofchch.org......
Poll: Is it okay to grocery shop in your PJs?
I'm sure you've seen it while doing your weekly shop... In fact, it may have even been you.
What do you think about people heading to the supermarket in their pyjamas?
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14.4% It's fine!
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75% It's questionable
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10.6% Other - I'll share below
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