Customer won’t pay an invoice? Your debt recovery options in New Zealand
If a customer will not pay an invoice in New Zealand, check the agreement, confirm the payment is overdue and establish whether the debt is disputed. Your options may include a payment arrangement, a court claim or, for a qualifying company debt, a statutory demand. Choose the process before escalating.
What should you check before chasing an unpaid invoice?
Pull together the accepted quote, contract, purchase order, terms of trade, invoice and any messages about the work. Check the identity of your customer: a company, a sole trader and an individual are different parties. A trading name alone may not identify the person you need to pursue.
Before escalating, confirm:
- The agreed work or goods were supplied and any conditions for payment have been met.
- The due date has passed and the invoice reached the right person.
- Any variations or extra charges were authorised.
- You have recorded payments, credits and complaints accurately.
Do not assume that printing an interest rate or collection charge on a late invoice makes it enforceable. Entitlement to additional charges needs a proper contractual or other legal basis. A review of your terms of trade and trading protection can help prevent the same problem recurring.
Does the customer accept or dispute the debt?
There is a practical difference between “I accept the invoice but cannot pay this month” and “The work was defective, so I do not owe the amount claimed”. Keep the customer’s response, and ask for details if a complaint is vague.
For example, a Christchurch contractor may be chasing an agreed balance while the customer says a variation was never approved. The dispute may concern the additional work rather than the whole account. Establishing that distinction can narrow what needs resolving.
A written payment arrangement may be appropriate where liability is accepted. Record the balance, instalment dates and what happens if payments are missed. Before compromising a claim, consider the commercial value of settlement alongside the chance of recovering payment.
Can you use the Disputes Tribunal?
The Tribunal’s financial jurisdiction increased to $60,000 on 24 January 2026. That can make it relevant to more small-business disputes. However, it is not simply an unpaid-invoice collection service. The Disputes Tribunal Act’s rules on debts restrict claims for debts or liquidated demands where there is no dispute.
A lawyer can help assess whether the nature and value of your claim fit the Tribunal or whether a court claim is more suitable. Do not assume that silence from a customer automatically establishes the kind of dispute the Tribunal requires.
When might a statutory demand be appropriate?
A statutory demand is a formal procedure under the Companies Act 1993 for a debt owed by a company. It is not an ordinary reminder letter or a process for every type of debtor.
There are requirements about the debt, service and response, and strict time limits. A substantial dispute or qualifying counterclaim can be grounds to set a demand aside. Using the procedure as pressure where it is inappropriate can expose a creditor to costs. Obtain advice before serving one, or immediately if your company receives one.
Is pursuing the debt commercially worthwhile?
| Situation | Possible next step |
|---|---|
| Customer accepts the debt | Consider a written payment arrangement or advice on a court claim. |
| Genuine dispute about liability | Assess whether the Tribunal’s rules and financial limit fit the claim. |
| Qualifying company debt | Obtain advice before considering a statutory demand. |
A successful claim and actual payment are separate outcomes. Before proceeding, consider the debtor’s ability to pay, the evidence, likely cost and the effect on any continuing business relationship. If insolvency is a concern, our personal and commercial insolvency services can help you understand your position.
What should you bring to a debt recovery consultation?
Bring the agreement, complete account statement, correspondence, customer details and any security or guarantee documents. Tell us about limitation concerns or urgent deadlines at the outset. Different claims have different timing rules; repeated reminders are not a reason to leave advice until the last moment.
Canterbury Legal’s debt recovery lawyers in Christchurch can help assess the claim, communicate with the debtor and identify a proportionate next step. Contact our team before further delay makes the situation harder to resolve.
What other questions do people ask?
Can I add interest to an overdue invoice?
Only where there is a proper contractual or other legal basis. Printing an interest rate or collection charge on a late invoice does not by itself make the charge enforceable.
Can the Disputes Tribunal collect an undisputed debt?
The Tribunal is not an ordinary debt-collection service. Its rules restrict claims for debts where there is no dispute. Assess the nature and value of the claim before choosing the Tribunal or a court process.
Can I serve a statutory demand on a sole trader?
A Companies Act statutory demand is a procedure for a qualifying debt owed by a company. It is not the ordinary recovery route for a sole trader or an individual.
Which official sources explain these rules?
- Ministry of Justice: Disputes Tribunal jurisdiction
- Disputes Tribunal Act 1988: restrictions concerning debts
- Companies Act 1993, sections 289–290
Information checked on 27 October 2026. This article provides general information about New Zealand law and is not a substitute for advice about your circumstances.
