Around 457,000 New Zealanders are behind in payments, according to credit bureau Centrix, amid turbulent economic conditions many Kiwis are facing.
Fair Go reporter Garth Bray spoke to experts on how to deal with a call from a debt collector in the hopes of helping Kiwis navigate the difficult financial situation.
Joining Breakfast this morning, Bray said if someone gets a letter from the debt collector which says they owe money, it’s best if you don’t ignore it and cooperate with them.
“Often the hardest battle for them is to try and find you. So if they’ve tracked you down, it’s best to actually just go ‘OK fine, I’ve got this now’.”
Bray said the next course of action is to figure out if the money is really owed, as in some stories reported on Fair Go, there can sometimes be cases of identity theft.
If a situation like this is applicable, Bray said “you’ve got to explain that pretty quickly” in a way “that doesn’t make it feel like you’re just trying to avoid paying it”.
Bray added there are other rare circumstances where the person is being treated unfairly by the person they owe money to, such as someone asking the debt collector to find someone before the money is due.
“You’ve got to engage with [the debt collector]. You’ve got to start talking … and make a plan. Even if you’re making a plan to pay $5 a week or $50 a month or whatever you can afford.
“The law requires [the creditor] to be reasonable, and if you’re being reasonable as well and say ‘I’m making a contribution towards this’, it is just lowering the bar for them to take you through the court processes.”
If someone is really sure they don’t owe the money, Bray said another option is available by heading to the Disputes Tribunal.
While the tribunal costs money, they will look into cases where the money owed is below $30,000.
“You can apply and say ‘hey, I want your judgement that I don’t owe this money’.”
Fair Go’s full in-depth story on how to deal with debt airs at 7.30pm tonight on TV1 and TVNZ+.