Debt Recovery Approach – Commercial

Key points

  • We seek to resolve debts by first meeting with the debtor to discuss ways to pay the outstanding account
  • If the debtor cannot pay in full, then we will set up a payment arrangement with your consent.
  • Our system will monitor any payment arrangement to ensure payments are made on time. If payments are missed and the debtor breaks the agreement, then we move to legal action.
  • We undertake legal action only on your advice.
  • Legal action begins with the issuing of a statement of liquidated claim (‘summons’). We’ll serve this document personally to ensure the debtor is aware that legal action has been instigated.
  • We serve documents personally to ensure the correct person has received the papers and to maintain full control of the process. For these reasons we do not serve documents by mail. All our summonses are served in a proper and timely manner.

See also Approach to Debt Recovery for Councils.

Initiating legal action

When we take legal action, the initial step is to issue a summons. A summons is a claim to the court that there is money owed. However, the courts do not recognise the debt as legally owing until such time as judgment is entered.

Once the summons is served, the defendant is allowed 28 days to either:

  • file a defence
  • make full payment, or
  • enter into a payment arrangement.

If none of these occur we then request permission to proceed to judgment. Once judgment has been obtained, the court recognises the debt as outstanding and the debtor’s credit record can become affected.

Judgment is a document that is stamped by the court; it is not served on the debtor. Debtor may have no knowledge that judgment has been made against them until applying for credit.

Once judgment has been obtained, measures can be taken to enforce the debt and collect the money owed.

There are different ways to collect an overdue account. Before commencing we will discuss these options and request your permission to proceed.

Normally, we will proceed with a garnishee notice issued on a debtor’s bank account or, if an individual, over wages to the value of the debt.

A garnishee notice has advantages and is usually a quicker and more economical way to resolve debt issues.