Old debt, slow repayments
Question from Yvonne updated on 1st January 1970:
Following an old Tribunal order, I bumped into a tenant who owed me money. She told me her address so I wrote and asked for payment. She reluctantly has started paying me $5 a week. Should I say nothing and wait the nine years it will take her to pay the debt? Or should I write to her again thanking her for payment and suggest she increase the amount? Or if she refuses to pay more then have an Order for Examination?
Our expert Juliet Robinson responded:
If you think nine years is too long to wait for collection, you’re probably right. The District Court collection process should find a way of achieving higher weekly repayments. Your tenant should be endeavouring to pay off her debt in two to three years rather than your estimated nine years. Try getting your tenant to set up an automatic payment to you for $15 to $20 per week, thereby enabling earlier repayment. If she refuses, you have two courses open to you via the District Court collections process: an Order for Examination or a Distress Warrant. An Order for Examination entails the tenant appearing before a registrar and having her income and expenditure examined to assess how much she can afford to repay on a regular basis. A Distress Warrant, on the other hand, permits a bailiff to seize goods belonging to a debtor and sell them to recoup the money owed to a creditor. This course of action is available only if the goods (e.g. a car) are owned completely by the creditor and no other person or company has an interest in the goods. If you can achieve it, your debt will be recovered in a few weeks rather than years. One point to note, the court fees that you pay to pursue either of these District Court collections processes are added to the debt and are recoverable (in time).
Quinovic's outstanding people and systems provide the most professional, effective and reliable residential property management service in the NZ market for over 22 years.
Search the Ask an Expert archive
Browse all questions in the Ask An Expert Archive »