I don’t know if it’s something in the air, but we’ve recently had a number of clients coming to us for advice about debts they owe to creditors – but way too late.
So I offer some basic advice which I hope is just common sense for most readers of this blog:
(1) pay your bills on time;
(2) if you can’t pay your bills on time, talk to your creditor(s) about it and get them to agree in writing to a payment plan (an exchange of emails is fine for this purpose). Make sure they agree – just because you propose something doesn’t mean they have agreed. Remember, they are doing you a favour – don’t get aggressive if they don’t agree to your first proposal;
(3) if you dispute a bill, take it up with your creditor as soon as you get the bill (and record it in writing) – don’t wait until they set the debt collectors onto you;
(4) if the debt collectors come calling, see my point (1) or call your lawyer IMMEDIATELY (not 3 weeks later);
(5) if you receive a statutory demand from a creditor, call your lawyer IMMEDIATELY (not 3 weeks later);
(6) if you haven’t paid your rent and you receive a Property Law Act notice call your lawyer IMMEDIATELY (not 3 weeks later); and
(7) if you get served with court proceedings call your lawyer IMMEDIATELY (not 3 weeks later).
If you can’t resolve a dispute with a creditor about how much you owe, you can take it to the Disputes Tribunal and get a referee to sort it out. Here’s the form you need to start that process.
DON’T put your head in the sand and hope it all goes away. If you leave it too late, you will have to pay the original invoice, interest on the unpaid amounts, collection costs, your creditor’s legal fees, my legal fees and potentially court costs. If you haven’t paid your rent you can add the cost of the landlord evicting you and changing all of the locks and any losses that they might suffer re-letting the premises. If your creditor is the IRD, then call your accountant immediately and get their help.
There are companies that can help by providing invoice finance if working capital is tight, you can talk to your bank and some service providers will also provide instalment plans. The last thing you need when money is tight is to be incurring legal bills.
Finally, lawyers are not miracle workers. If you call me when you owe money to a creditor, my advice is likely to be that you should pay the bill.