How to re­cover undis­puted­debts

Kapi-Mana News - - WHAT’S ON - ALAN KNOWSLEY

Le­gal mat­ters If the debtor is a com­pany, you can serve a statu­tory de­mand on it when there is no dis­pute and the amount ow­ing is more than $1000.

When you iden­tify a bad debtor, it is im­por­tant you take im­me­di­ate ac­tion to give your­self the best chance of get­ting the money you are owed. It pays to act early. The most per­sis­tent usu­ally get paid first.

If the in­voice has not been paid on time, ring the client and ask when pay­ment will be made.

If an ac­cept­able pay­ment date is of­fered, con­firm that to them ver­bally and fol­low up in writ­ing.

Make sure you keep a note of the prom­ise to pay and date and sign the note.

That will be vi­tal ev­i­dence if pay­ment is not made.

If pay­ment is not promised and you are un­sure whether there is a dis­pute, you may need to get le­gal ad­vice.

If there is no gen­uine dis­pute and the debtor con­tin­ues to refuse to pay, you can ap­ply to a court for a sum­mary judg­ment.

Sum­mary judg­ment is avail­able only where a debtor has no rea­son­able de­fence to a claim for pay­ment.

Where an in­voice has been is­sued and no dis­pute raised un­der your terms of trade, it is un­likely the court will ac­cept a later claimed dis­pute, but fac­tual dis­putes will usu­ally re­quire wit­nesses be­fore the court can de­cide the claim.

An ex­am­ple of a clearly in­dis­putable debt is in a con­struc­tion con­tract if a pay­ment claim has been is­sued and not paid.

Or where a pay­ment sched­ule has been pro­vided and not paid, the un­paid amount of the pay­ment claim or pay­ment sched­ule be­comes a debt due and re­cov­er­able.

Pro­vided the pay­ment claim was is­sued cor­rectly, the client will have no de­fence to a claim for re­cov­ery and you can ask the court to fast-track your claim.

A sum­mary judg­ment process is started by fil­ing with the court (and serv­ing on the other party) a state­ment of claim, an ap­pli­ca­tion for sum­mary judg­ment (the facts on which you claim there is no de­fence), and a sup­port­ing af­fi­davit (ev­i­dence given on oath to sup­port your claim), plus other for­mal doc­u­ments.

If you want to make use of the sum­mary judg­ment process, it is im­por­tant you file the right in­for­ma­tion at the be­gin­ning.

If the court thinks there might be a de­fence, or if you have missed some­thing in your doc­u­ments, the claim can be put back on to the nor­mal track and be dealt with as if there is a de­fence to it.

It pays to get le­gal ad­vice at the be­gin­ning be­cause you get only one shot at seek­ing sum­mary judg­ment of your claim.

Once you have a judg­ment, it can be en­forced by an at­tach­ment or­der on wages or in­come, seizure and sale of prop­erty or even an ap­pli­ca­tion for bank­ruptcy of an in­di­vid­ual or wind­ing up of a com­pany.

Which one is best will de­pend on the debtor’s cir­cum­stances, as­sets and in­come.

If the debtor is a com­pany, you can serve a statu­tory de­mand on it when there is no dis­pute and the amount ow­ing is more than $1000.

If you serve a statu­tory de­mand on a com­pany and it fails to com­ply with its terms, it is deemed to be in­sol­vent and you can file pro­ceed­ings in the High Court to have the com­pany liq­ui­dated and its as­sets di­vided among cred­i­tors.

PHOTO: REUTERS

There are al­ter­na­tives to hit­ting a casino to get money owed.

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