Anyone who has ever done a transaction will know that they will run into debt one way or another. You will need to provide credit for long-term customers, when selling something that requires a credit card or if you are a property owner waiting for your tenant to pay rent.
Eventually, there will be late payments or bad debt, and you will have to recover your debt. Debt collection in Wellington requires legal assistance to make sure that you are following all of the necessary requirements when collecting debt.
It is important that you have a good understanding of the process so that you can avoid costly fines, legal disputes and other issues.
Do: Have a Clear Terms of Trade
As with all transactions, you should have a legal contract ready or a Terms of Trade. Along with all of the regular information required, you will have to include information on what will happen in the event that a payment is missed.
This may include repossession of purchased goods, late payment fees and the like. You have to make sure that the debtor fully understands the consequences of not paying in a timely manner.
Don’t: Forego Drafting a Contract
Whether it is a small transaction or a big one, always draft a contract so your debtor understands how important it is to pay their debts. Never forego drafting a contract, as this will pose problems should the debt be disputed. Hire a lawyer who can draft you a proper Terms of Trade contract that holds up in court.
Do: Follow the Credit Act
As a debtor, you need to have a good understanding of the Credit Act of New Zealand. It gives you a full overview of consumer rights and your rights as a creditor. You want to fully understand what is owed to you and what you are allowed to demand from the person who owes you.
Don’t: Harass the Debtor
You should never harass the debtor in any way. You cannot coerce them or send threatening messages or calls. You are only legally allowed to repossess items that are stated in the contract; otherwise, it would be an illegal act.
Debt collection is not entirely pleasant, but the truth is that unpaid debt is bad for both parties involved.