No one likes debt. Whether you owe money or someone owes you, debt can be stressful. If someone owes you money and you have a hard time collecting, a debt recovery lawyer may come in handy.
New Zealand law can be difficult to comprehend for someone who is not a lawyer. Here are some things you should know about debt collection.
In most cases, you give out a loan or extend credit to people and expect they will pay you back. However, you may have a hard time collecting on the loan if you do not say so in writing. You should state in a loan agreement or terms of trade what will happen if the person who owes you money does not pay you in time, or at all. This could include repossessing of property or any fees you might charge in addition to the money owed.
Putting this clearly in the contract is important in case you seek legal recourse. A debt recovery lawyer can advise you on what you should put so that the contract drawn up follows New Zealand laws, such as the Credit Act.
In some cases, the person who owes you money might dispute the debt. He or she may say that someone else is responsible for the debt, that the debt is not legally enforceable, or that the amount is not right. If this happens, you can ask the Disputes Tribunal to settle the case if the amount involved is between $15,000 and $20,000. If it is more than that, you will have to go to District Court.
Dispute issues usually involve technical details that you may not be able to handle on your own, so have a lawyer handle these for you.
Getting the tribunal or court to order the debtor to pay is not the end of it. You still have to do civil enforcement on your own by applying to the court. You can get in a lot of trouble if you do not know how to handle civil enforcement legally. For example, you have to wait 48 hours after the court’s decision before you can start collecting the debt. You cannot tell other people about the debt or use threats. If you do any of these things, you may not be able to get your money back. The debtor may even take legal action against you. Having a debt recovery lawyer handle civil enforcement keeps you safe from legal issues.
Debt collecting in New Zealand is stressful for everyone involved. While you can do most of the things a debt recovery lawyer will do, you may make costly mistakes. Hiring a lawyer to advise you every step of the way can keep you from getting into legal trouble.