Debt Recovery
Recovering money from debtors can be a very stressful and time-consuming process. Our team provides a wide range of legal services for both creditors and debtors which include individuals and corporates. When engaging Wynyard Wood, you can expect:
- Robust legal advice on the debt recovery options available to you
- Experienced lawyers handling your matters
- Great communication and regular updates on file
- Competitive legal fees
Debt Recovery Options
When seeking to recover a debt, there are several options to consider before choosing to go through the court system. However, if the debtor still refuses to pay or disputes the debt, you may be left with no option but to issue Court proceedings. Depending on the sum owed, you can choose to:
- File a claim in the Disputes Tribunal but only if the debt owed is less than $30,000 and the debtor disputes they owe the debt. Note: lawyers are not allowed to represent parties at the hearing, but we can provide legal advice and assist you with your claim or defence;
- Issue proceeding in the District Court if the debt owed is less than $350,000;
- Commence a claim in the High Court if the debt owed is over $350,000.
Enforcement options
Provided you obtain judgment, an order for repayment of the debt becomes legally enforceable.
There are various enforcement steps available, such as:
- Charging order and sale order – A charging order can be registered against property the debtor owns and prevents the debtor from selling their property until the judgment debt is repaid. These orders are available in both, District Court and High Court. Charging orders are usually obtained to ensure that the debtor does not dispose of the property.
- Attachment Order – An attachment order enables the employer or Work and Income to deduct a specific sum of the debtor’s wages and pay that directly to the creditor.
- Garnishee Order – A garnishee order allows the credit to recover the judgment debt from any debts owing to the debtor by a third party. The court can make a garnishee order requiring the third party to pay money directly to you, for example, a bank may be ordered to pay money directly to you if there is money held in the debtor’s bank account.
- Bankruptcy – This is an enforcement option where an application is made through the High Court. A request to issue a bankruptcy notice is filed with the High Court nearest to where the debtor resides. Once the bankruptcy notice is sealed and returned, the debtor has 10 working days to pay the judgment debt (after service). If the debtor does not pay within 10 working days, they have committed an act of bankruptcy. You can then file an application seeking to adjudicate the debtor bankrupt.
Before doing so, the court will set down a hearing date on the application. If the debtor ignores the request for payment in the application and does not attend the hearing, the court will adjudicate (subject to its discretion) the debtor bankrupt.
Once the debtor is adjudicated bankrupt, the Official Assignee will take control of the debtor’s income and assets and will exercise that control for the duration of bankruptcy. The Official Assignee will sell the assets to repay the creditors.
Whilst there are several options available to you when recovering a debt, it is always recommended to seek legal advice before making a decision.