Getting stiffed on a job is one of the most frustrating experiences in the trade. You've done the work, issued the invoice, and the client has gone quiet. Or they're pushing back on items that were clearly in the quote.
Here's the step-by-step process for recovering what you're owed in New Zealand.
Step 1: Friendly Follow-Up (Days 1–7 Overdue)
Before escalating, give the client the benefit of the doubt. Invoices get lost. Payment gets delayed. A simple follow-up often resolves it.
Call first — email is too easy to ignore. A quick call along the lines of "Just following up on invoice #INV-001 from last week — did it come through okay?" is all you need. Many late payments are genuinely administrative, not intentional.
If you don't hear back within a day or two, send a follow-up email with the invoice attached. Keep the tone neutral and professional at this stage.
Step 2: Formal Payment Reminder (Days 8–21 Overdue)
If the friendly approach hasn't worked, it's time for a more formal written reminder. This should:
- Reference the invoice number, amount, and original due date
- State how many days overdue it is
- Request payment by a specific date (7 days from the reminder)
- Note consequences if not paid (debt collection, legal action)
- Include your bank account details clearly
Keep the tone firm but professional. You're creating a paper trail that will matter if you escalate further.
Our free Payment Reminder template has a "first reminder" and "final notice" version ready to download.
Step 3: Disputes Register — A Powerful NZ Tool (Often Overlooked)
The Disputes Register (formerly called the Blacklist, now at disputesregister.co.nz) is a New Zealand credit reporting database where you can list a debtor for $38. Once filed, the listing appears on the business's credit report — which can affect their ability to open supplier accounts, get credit, and deal with other tradies.
The threat of filing often prompts payment faster than anything else. Many tradies send a "Final Notice" letter stating they'll file a Disputes Register listing within 5 business days if payment isn't received.
It's not a legal action and doesn't guarantee payment, but it's cheap, fast, and has a surprisingly good success rate for smaller amounts.
Step 4: Disputes Tribunal (Claims Under $30,000)
The Disputes Tribunal is New Zealand's small claims court. It's free to file (up to $2,000 claim) or $180 for claims above that, and it handles claims up to $30,000 (or up to $60,000 if both parties agree). No lawyers — just you, the client, and a referee who hears both sides and issues a binding decision.
Timeline: expect 4–8 weeks from filing to decision, depending on your region.
What you need: - A copy of your quote or contract - The invoice(s) - Written communication showing you tried to resolve it - Any variation orders or job completion sign-offs
The Disputes Tribunal is your best option for residential client disputes under $30,000. The process is designed for non-lawyers and most tradies navigate it without legal help.
File online at disputestribunal.govt.nz.
Step 5: Construction Contracts Act Adjudication
For construction work disputes (building, plumbing, electrical, etc.), the Construction Contracts Act 2002 provides a fast-track adjudication process. This is faster and cheaper than going to court, and specifically designed for payment disputes in the construction sector.
You can apply for adjudication when: - You've issued a formal payment claim and the respondent hasn't issued a payment schedule - The respondent issued a payment schedule but hasn't paid the scheduled amount - There's a dispute about the amount owing under the contract
Adjudication typically takes 4–8 weeks from appointment. The adjudicator's decision is binding and can be enforced as a court judgment. Costs are shared or awarded depending on the outcome.
For unpaid progress claims, retention disputes, or variation disagreements on larger construction jobs, this is often faster and cheaper than the District Court.
Step 6: District Court ($30,000–$350,000)
For amounts between $30,000 and $350,000 not resolved through other means, the District Court is the next step. This is a formal legal process — you'll need a lawyer, it takes months, and costs add up.
Before going to court, consider: - How strong is your documentation? (contract, invoices, communications) - Can the client actually pay even if you win? - Is the amount worth the time, stress, and legal fees?
At this level, most tradies engage a construction lawyer. Initial advice typically costs $200–$500 for a review of your situation and options.
Step 7: Debt Collection Agencies
Alternatively, you can hand the debt to a collection agency at any stage. They typically charge 10–30% of the recovered amount as commission, so you receive less — but you remove yourself from the process.
Debt collection agencies are useful for: - Small debts where court action isn't cost-effective - Clients who've moved or are hard to contact - Situations where you've exhausted your own follow-up
Reputable NZ agencies include Baycorp and NCI. Make sure you're comfortable with their collection methods — you're still associated with how the debt is pursued.
Know Your Limitation Period
In New Zealand, the six-year limitation period for contract claims (under the Limitation Act 2010) means you have six years from the date payment was due to take legal action. Don't let old invoices sit — the longer you wait, the harder recovery becomes and the less likely courts are to side with you.
When to Accept a Loss
Sometimes the cost of recovery exceeds the value recovered. If a client owes you $800, issuing a Disputes Tribunal claim and attending a hearing might cost you more in time than you'd recover.
Write a loss off when: - The client is bankrupt or insolvent (you're an unsecured creditor) - Legal costs would exceed the debt - The evidence of the agreement is weak - The relationship had other value worth preserving (rare, but happens)
For tax purposes, a bad debt can be written off and the GST component can be claimed back — ask your accountant how to process it correctly.
Key Takeaways
- Start friendly — most late payments are administrative
- Get everything in writing from the start (contracts, variations, sign-offs)
- Disputes Register ($38) is often the fastest non-legal deterrent
- Disputes Tribunal (free–$180) handles claims up to $30,000
- CCA adjudication is the fastest route for construction payment disputes
- Six-year limitation applies — don't sit on old unpaid invoices
- Accept losses strategically — not every debt is worth pursuing
Protect yourself before disputes arise with our free Terms of Trade template, CCA Payment Claim template, and Payment Reminder letter.
NZ Tradie Tools provides free calculators, templates, and guides for New Zealand tradies. This article is general information only — for specific legal advice, consult a construction lawyer or Citizens Advice Bureau.