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A Debt Recovery Letter is a formal written notice that businesses or individuals send to request payment of overdue money. It serves as the first step in collecting unpaid debts in New Zealand, laying out exactly what's owed, when it was due, and how to pay it.

The letter needs to follow NZ's Fair Trading Act and debt collection guidelines - keeping the tone professional while giving debtors clear payment options and reasonable timeframes. Many Kiwi businesses send these before considering more serious actions like court proceedings or hiring collection agencies. It creates a paper trail and often resolves payment issues without further legal steps.

Send a Debt Recovery Letter when an invoice remains unpaid past its due date, typically after 30-60 days in New Zealand. This formal reminder works especially well for business-to-business debts or when dealing with clients who have previously been reliable payers but have fallen behind.

Time your letter strategically - send it before the debt becomes seriously overdue but after normal payment reminders have failed. Many Kiwi businesses issue these letters around the 90-day mark, as this timeframe maintains professional relationships while showing you're serious about collection. It's particularly important to act before the debt approaches the six-year limitation period under NZ law.

• Debt Collection Form Letter: A basic first notice with standard payment request language - ideal for routine follow-up on overdue accounts
• Collections Notice Letter: A more formal reminder with specific payment terms and consequences outlined
• Collection Demand Letter: A firm final notice stating clear deadlines and legal implications
• Debt Collection Validation Letter: Details debt verification and documentation requirements
• Collection Agency Demand Letter: Used by professional collectors with stronger enforcement language

• Business Owners: Issue these letters to recover payment from clients, suppliers, or customers who have unpaid debts
• Credit Managers: Oversee the debt recovery process and decide when to escalate from friendly reminders to formal letters
• Debt Collection Agencies: Send letters on behalf of businesses, using specialized templates that comply with NZ collection laws
• Legal Professionals: Draft and review letters to ensure compliance with Fair Trading Act requirements
• Accounts Receivable Staff: Handle day-to-day management of overdue accounts and initial payment follow-ups
• Debtors: Receive these letters and must respond to payment demands or face potential legal action

• Basic Details: Gather exact debtor name, address, and contact information from your records
• Debt Information: Compile original invoice numbers, dates, amounts, and any partial payments made
• Payment History: Document all previous payment requests and communications with the debtor
• Due Dates: Set clear payment deadlines that align with NZ debt collection guidelines
• Payment Options: List all accepted payment methods and current bank account details
• Documentation: Attach copies of relevant invoices, contracts, or delivery confirmations
• Template Selection: Use our platform to generate a legally-compliant letter that includes all required elements

• Creditor Details: Full legal name, business number, and contact information of the party seeking payment
• Debt Specifics: Clear breakdown of original amount, interest charges, and current total owing
• Payment Timeline: Original due date, current date, and reasonable deadline for response
• Legal Reference: Citation of relevant sections of NZ's Fair Trading Act and Credit Contracts Act
• Payment Instructions: Detailed banking information and acceptable payment methods
• Consequences Statement: Clear, non-threatening outline of next steps if payment isn't received
• Documentation Notice: List of attached supporting documents proving the debt
• Dispute Rights: Information about the debtor's right to challenge the debt claim

A Debt Recovery Letter differs significantly from a Debt Settlement Agreement. While both deal with unpaid debts, they serve different purposes at different stages of the collection process.

• Timing and Purpose: A Debt Recovery Letter is an initial formal demand for full payment, while a Debt Settlement Agreement outlines terms for partial payment or a payment plan both parties have agreed to
• Legal Effect: Recovery letters start the collection process but aren't binding contracts; Settlement Agreements create new, legally binding payment obligations
• Negotiation Stage: Recovery letters come before any negotiation, while Settlement Agreements represent the outcome of successful negotiations
• Content Focus: Recovery letters state the original debt and demand payment; Settlement Agreements detail new payment terms, schedules, and often include liability releases