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When someone owes you money, it can quickly become stressful, especially if they stop responding, dispute the invoice, or promise payment but never follow through.
There are a number of ways to recover a debt. Important factors that dictate which option is best for you are the amount owed, whether the debt is disputed, who owes the money, and whether the debtor has the ability to pay.
This article explains common debt recovery options in New Zealand.
Debt recovery is the process of taking steps to recover money that is legally owed to you or your business.
We can review the debt and advise you on your options for recovery. Initial steps can include:
If these options do not yield full recovery of the amount owed, the next steps can include filing a claim in the Disputes Tribunal, District Court, or High Court, or applying for the debtor to be liquidated or adjudicated bankrupt.
It is important to note that construction contracts have a separate and specific regime for claiming and enforcing amounts owed under the Construction Contracts Act 2002.
If you are considering taking steps to recover a debt, and/or engaging a lawyer, it is important to collate the following documentation:
In many cases, the next step is to send a formal letter of demand. This letter usually sets out the amount owed, the reason the debt is due, the deadline for payment, and what may happen if payment is not made.
A letter of demand, particularly from a law firm, can often resolve the matter without needing court action. Engaging a lawyer escalates the matter, shows the debtor that you are serious about enforcing the debt, and puts them on notice of the potential consequences of not repaying the debt.
Filing a claim in the Disputes Tribunal (previously known as the Small Claims Tribunal) can be appropriate for smaller, disputed debts.
The Disputes Tribunal can hear claims up to $60,000. This is an important change, as the previous limit was $30,000. The Ministry of Justice has also confirmed a new filing fee of $468 for claims between $30,001 and $60,000.
The Disputes Tribunal is designed to be quicker, cheaper and less formal than court. It is generally used for genuine disputes involving smaller civil claims. Lawyers usually cannot represent parties at the hearing, although we can advise you on the strength of your claim, whether a claim in the Disputes Tribunal is the best method of recovering the debt, and assist you with preparing and attending the Tribunal.
The Tribunal is not intended for debt collection and enforcement, but as a practical forum for resolving disputes. If you are simply looking to enforce a debt, it is unlikely to be your best option.
If the debt is not disputed, but the debtor still will not pay, you may need to consider court action.
For many debt claims, this will involve filing a claim in the District Court. If the debtor does not respond, it may be possible to apply for judgment by default. If the matter is defended, the court process may continue through further steps before a final decision is made.
If the debt is small, but not disputed, or for more than $60,000.00, you may need to file court proceedings. The correct forum depends mainly on the value and complexity of the claim.
As of 2026:
A statutory demand is a formal legal demand made against a company that owes a debt.
It is often used where:
A statutory demand should not be used lightly. There are specific requirements for the form and service of a statutory demand.
There is also risk for creditors issuing demands, since creditors risk costs exposure if a demand is set aside, including where there is a substantial dispute regarding the debt or a counterclaim. Legal advice is strongly recommended before issuing or responding to a statutory demand.
Time limits are important.
Under the Limitation Act 2010, a defendant may have a defence to a money claim if the claim is filed at least six years after the act or omission on which the claim is based. The Act also includes rules for late knowledge claims and a longstop period in some situations.
In simple terms, many debt recovery claims need to be acted on within six years. However, limitation periods can be complex, especially where there have been part payments, acknowledgements of debt, fraud, late knowledge, deeds, guarantees, or earlier judgments.
If a debt is old, it is best to get legal advice before taking action.
Winning a claim does not always mean payment happens automatically.
If a court or tribunal makes an order requiring payment and the debtor still does not pay, further enforcement steps may be needed. Depending on the circumstances, these may include options such as deductions from income, seizure of property, charging orders, or other civil enforcement processes.
The best enforcement option depends on what is known about the debtor and their income, assets, and financial position.
Debt recovery is not only about whether the money is owed. It is also about whether the debtor can realistically pay.
Before escalating a debt recovery matter, it is worth considering:
In some cases, a negotiated repayment arrangement may be more cost effective than court proceedings.
If you are owed money, or you have received a demand for payment, it is important to understand your options before taking the next step.
Getting advice early can prevent wasted time and costs on pursuing steps that do not yield any recovery, and can secure your interest ahead of other creditors.
Getting advice early can help you avoid unnecessary costs and choose the most practical path forward.
When someone owes you money, it can quickly become stressful, especially if they stop responding, dispute the invoice, or promise payment but never follow through.
There are a number of ways to recover a debt. Important factors that dictate which option is best for you are the amount owed, whether the debt is disputed, who owes the money, and whether the debtor has the ability to pay.
This article explains common debt recovery options in New Zealand.
Debt recovery is the process of taking steps to recover money that is legally owed to you or your business.
We can review the debt and advise you on your options for recovery. Initial steps can include:
If these options do not yield full recovery of the amount owed, the next steps can include filing a claim in the Disputes Tribunal, District Court, or High Court, or applying for the debtor to be liquidated or adjudicated bankrupt.
It is important to note that construction contracts have a separate and specific regime for claiming and enforcing amounts owed under the Construction Contracts Act 2002.
If you are considering taking steps to recover a debt, and/or engaging a lawyer, it is important to collate the following documentation:
In many cases, the next step is to send a formal letter of demand. This letter usually sets out the amount owed, the reason the debt is due, the deadline for payment, and what may happen if payment is not made.
A letter of demand, particularly from a law firm, can often resolve the matter without needing court action. Engaging a lawyer escalates the matter, shows the debtor that you are serious about enforcing the debt, and puts them on notice of the potential consequences of not repaying the debt.
Filing a claim in the Disputes Tribunal (previously known as the Small Claims Tribunal) can be appropriate for smaller, disputed debts.
The Disputes Tribunal can hear claims up to $60,000. This is an important change, as the previous limit was $30,000. The Ministry of Justice has also confirmed a new filing fee of $468 for claims between $30,001 and $60,000.
The Disputes Tribunal is designed to be quicker, cheaper and less formal than court. It is generally used for genuine disputes involving smaller civil claims. Lawyers usually cannot represent parties at the hearing, although we can advise you on the strength of your claim, whether a claim in the Disputes Tribunal is the best method of recovering the debt, and assist you with preparing and attending the Tribunal.
The Tribunal is not intended for debt collection and enforcement, but as a practical forum for resolving disputes. If you are simply looking to enforce a debt, it is unlikely to be your best option.
If the debt is not disputed, but the debtor still will not pay, you may need to consider court action.
For many debt claims, this will involve filing a claim in the District Court. If the debtor does not respond, it may be possible to apply for judgment by default. If the matter is defended, the court process may continue through further steps before a final decision is made.
If the debt is small, but not disputed, or for more than $60,000.00, you may need to file court proceedings. The correct forum depends mainly on the value and complexity of the claim.
As of 2026:
A statutory demand is a formal legal demand made against a company that owes a debt.
It is often used where:
A statutory demand should not be used lightly. There are specific requirements for the form and service of a statutory demand.
There is also risk for creditors issuing demands, since creditors risk costs exposure if a demand is set aside, including where there is a substantial dispute regarding the debt or a counterclaim. Legal advice is strongly recommended before issuing or responding to a statutory demand.
Time limits are important.
Under the Limitation Act 2010, a defendant may have a defence to a money claim if the claim is filed at least six years after the act or omission on which the claim is based. The Act also includes rules for late knowledge claims and a longstop period in some situations.
In simple terms, many debt recovery claims need to be acted on within six years. However, limitation periods can be complex, especially where there have been part payments, acknowledgements of debt, fraud, late knowledge, deeds, guarantees, or earlier judgments.
If a debt is old, it is best to get legal advice before taking action.
Winning a claim does not always mean payment happens automatically.
If a court or tribunal makes an order requiring payment and the debtor still does not pay, further enforcement steps may be needed. Depending on the circumstances, these may include options such as deductions from income, seizure of property, charging orders, or other civil enforcement processes.
The best enforcement option depends on what is known about the debtor and their income, assets, and financial position.
Debt recovery is not only about whether the money is owed. It is also about whether the debtor can realistically pay.
Before escalating a debt recovery matter, it is worth considering:
In some cases, a negotiated repayment arrangement may be more cost effective than court proceedings.
If you are owed money, or you have received a demand for payment, it is important to understand your options before taking the next step.
Getting advice early can prevent wasted time and costs on pursuing steps that do not yield any recovery, and can secure your interest ahead of other creditors.
Getting advice early can help you avoid unnecessary costs and choose the most practical path forward.
