Don't write it off yet

Unpaid invoices feel personal. They're not - most of the time it's a cashflow problem on the client's end, or someone avoiding an awkward conversation they know they'll have to have eventually. Either way, you're owed the money. NZ law gives you clear, practical tools to recover it.

The worst thing you can do is nothing. Unpaid invoices don't get easier to collect with time - they get harder. The moment a payment goes overdue, a clock starts ticking. Here's what to do.

Step 1: Confirm the invoice was actually received

Before you escalate, rule out the obvious. Email goes to spam. Accounting staff change. Addresses get updated without notice. Send the invoice again - as a PDF attachment, not pasted into the email body - to the correct accounts contact.

Use a read receipt if your email client supports it. Keep a record of every send: date, time, recipient. You'll need this if it goes to the Disputes Tribunal.

Step 2: Make direct contact by phone

Email is easy to ignore. A phone call is not. Call the decision-maker directly - not the receptionist, not a site supervisor. For residential clients, that's usually the homeowner. For commercial clients, it's the accounts manager or business owner.

Be calm and professional. You're not there to argue - you're there to establish a payment date. Ask directly: "I'm following up on invoice [number] for $[amount], which was due on [date]. When can I expect payment?"

Get a specific date, not "next week" or "soon." If they say Tuesday, write it down and follow up Wednesday morning if nothing arrives.

If they dispute the work, tell them you're happy to discuss it - but get the specific dispute in writing first. Do not agree to reduce the invoice verbally.

Step 3: Send a formal written demand

If phone contact doesn't result in payment within 7 days, send a formal written demand. This is not the same as a polite reminder - it's a legal document that establishes your intent to pursue the debt if it's not paid.

Your written demand should include:

Your name, business name, and contact details
The client's name and address
Invoice number, amount owed, and original due date
A clear statement that the invoice is overdue
A final payment deadline - 7 days is standard
A specific statement of what action you will take if payment is not received (Disputes Tribunal, debt recovery service, or both)

Send it by email and by registered post. Registered post creates a delivery record that's admissible if the matter goes to a tribunal or court. Keep a copy of everything.

Step 4: Use your rights under the Construction Contracts Act

If the work involves construction - building, electrical, plumbing, drainage, HVAC - the Construction Contracts Act 2002 (CCA) gives you a powerful, fast-track process that most tradies never use.

Under the CCA, you can issue a payment claim - a formal invoice that triggers a legally defined response timeline. Once you serve a payment claim:

The client (the "respondent") must respond with a payment schedule within 20 working days (or less, if your contract specifies a shorter timeframe)
If they don't respond, the full claimed amount becomes due - automatically - and you can enforce it in the District Court without a full hearing
If they do respond but underpay, you can take the dispute to adjudication - a fast, relatively cheap process (usually resolved in 20-35 working days) that doesn't require a lawyer

Adjudication under the CCA is faster than the Disputes Tribunal and can handle larger amounts. The Construction Disputes Centre and the Arbitrators' and Mediators' Institute of New Zealand both maintain panels of adjudicators.

Who does the CCA cover? It applies to most construction contracts in NZ - residential and commercial. It covers new builds, renovations, electrical work, plumbing, drainage, landscaping (if it involves earthworks), and painting. It does not cover supply-only contracts or professional services like architectural design.

For a detailed breakdown of CCA rights, see our guide to your legal rights when chasing unpaid invoices in NZ.

Step 5: File a claim with the Disputes Tribunal

For amounts up to $60,000, the Disputes Tribunal is the most practical tool available to NZ tradies. It's faster and cheaper than the courts, no lawyer is required in most cases, and its decisions are legally binding and enforceable.

Filing fees (current, from January 2026):

Claims under $2,000: $61
Claims $2,000-$4,999: $121
Claims $5,000-$30,000: $243
Claims $30,001-$60,000: $468

You file online at disputes.govt.nz. The process takes about 20 minutes. You'll need:

Your invoice(s) and any contract or quote
Evidence that the work was completed (photos, sign-off emails, completion messages)
Records of your attempts to collect (emails, call logs, written demands)
The client's full legal name and address

What to expect: The tribunal will schedule a hearing, usually within 6-8 weeks of filing. Both parties attend (in person or by phone). A referee hears both sides and makes a binding decision. The respondent does not need to agree to participate - the tribunal can make an order in your favour even if they don't show up.

If the decision goes in your favour and the client still doesn't pay, you can enforce the order through the District Court using a collections warrant. The order becomes a court judgment.

Step 6: District Court for amounts over $60,000

For invoices above the Disputes Tribunal's $60,000 limit, the District Court is the appropriate venue. This is more complex and usually involves some legal costs, but the process is well-established.

Consider engaging a lawyer, particularly if the amount is significant or the client is likely to defend the claim. Many solicitors offer a fixed-fee debt recovery service for straightforward commercial debts.

For amounts over $50,000 that are undisputed, you may also be able to issue a statutory demand - a formal notice under the Companies Act 1993 that, if unpaid within 15 working days, creates grounds for insolvency proceedings against a company. This is a significant escalation and should be discussed with a lawyer first.

Using a professional follow-up service

Before matters reach a tribunal or court, a professional calling service often resolves debts faster and with less damage to the client relationship.

A third-party follow-up call sends a clear signal: this is no longer a personal matter between you and the client, and the debt is being managed professionally. Many debtors who have been ignoring the tradesperson's calls will respond to a professional third-party contact - because it signals real intent to collect.

This approach is particularly effective for invoices in the $500-$10,000 range, where Disputes Tribunal action is an option but the cost and time may not feel proportionate.

What not to do

Don't threaten legal action unless you're prepared to follow through. Empty threats teach clients that your letters don't mean anything.
Don't discuss the debt on social media. Even true statements can constitute defamation in NZ if they damage reputation beyond what's necessary.
Don't accept partial payment without a written agreement on the balance. "I'll send you $500 now and sort the rest later" needs to be in writing with a date.
Don't remove your work or equipment without legal advice. "Self-help" remedies - like taking back materials - can expose you to liability even if the client owes you money.
Don't wait more than 30 days before escalating. Invoice recovery rates drop significantly after the 30-day mark.

The 6-year limitation rule

Under the Limitation Act 2010, you have 6 years from the date the debt became due to pursue it through the courts. This doesn't mean you should wait - recovery rates fall steeply over time. But it does mean that invoices from 2-3 years ago are not necessarily lost causes. Check the due date, not the invoice date.

FAQ

Can I charge interest on overdue invoices in NZ? Yes - but only if it was agreed in your payment terms from the start. You can't add interest retrospectively. A common rate is 2-3% per month. Include your late payment terms on every quote and invoice.

What if the client disputes the quality of the work? Get the dispute in writing immediately. Respond in writing addressing each specific point. If the dispute is frivolous or unsupported, proceed with debt recovery as normal - a disputed invoice is still enforceable if the dispute has no merit. If there's a genuine quality issue, try to negotiate a resolution before escalating.

Do I need a lawyer to use the Disputes Tribunal? No. The Disputes Tribunal is specifically designed for self-represented parties. Lawyers are not allowed to appear in most cases. You represent yourself, bring your documentation, and the referee makes a decision.

What if the client has gone into liquidation? If a company has gone into liquidation, you become an unsecured creditor. File a proof of debt with the liquidator. Recovery as an unsecured creditor is often partial at best, but you must file to preserve your right to any distribution. If you had a retention of title clause in your contract, your goods may be recoverable before they become part of the general estate - get legal advice.

Can I use the Disputes Tribunal against a sole trader or individual? Yes. The Disputes Tribunal handles claims against individuals, sole traders, and companies. You'll need the person's full legal name and address for the application.

Update log

16 June 2026 - Updated the Disputes Tribunal jurisdiction limit to $60,000 (was $30,000) and refreshed the filing-fee schedule to current figures ($61-$468). Why: the Tribunal's financial jurisdiction rose from $30,000 to $60,000, effective 24 January 2026, and filing fees changed. Sources: Ministry of Justice - Disputes Tribunal jurisdiction, Disputes Tribunal forms & fees.
5 April 2025 - Guide first published.

Last reviewed: 16 June 2026.