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Debt Collection Costs

Sample debt collection costs and time taken for using a property manager are displayed below. Compare these debt collection costs with using a debt collection company.

Property manager 8% commission on a debt of $1500 = $120 + GST

 

Time taken

Cost recovery
  1. Ring debtor (ex tenant) and make arrangement to pay by instalments

15-30 minutes

Nil
  1. Ring debtor up every time they miss payment

10 minutes +++++ every time

Nil
  1. Make out the order for examination and go to a JP or Court to swear and lodge

60 minutes

Nil - except the $108.80 Court filing fee
  1. Remember to diary a Phone call to the Court to ensure they have served debtor– no recovery

15 minutes

Nil
  1. Go to Court

90 minutes including travel

Nil – for time  Nil for travel
  1. Apply for warrant to arrest if debtor fails to appear

Included above per para 3

Nil
  1. Ring Court up to ensure warrant to arrest being auctioned

15 minutes

Nil
  1. Go to Court when called by Court – must be there in 30 minutes or they will let debtor go

60-90 minutes including travel if they are arrested by your closest Court -

Nil
  1. Total cost recovery

270 minutes +++ = 4.5 hours min.

$108.80

 

How much does your property manager cost you and are you recovering their costs at $26 per hour?

Are you mad – of course not?
Current Awarded Costs

for Debt Collection Companies

As awarded by Ministry of Justice as from 1.10.10

That can be recovered from debtors (ex tenants)

Order for examination

$108.80

Solicitor’s preparation of order for examination

$306.67

Solicitor’s appearance at examination hearings (per hearing)

$153.33

Usual total if debtor appears at first examination hearing

$552

 

 

Solicitor’s preparation of warrant to arrest

$153.33

Solicitor’s appearance when debtor arrested

$153.33

Total added to debt and recovered from debtor

$858.66

 

 

Sure these costs have to be paid upfront by the debt collection company but at least we can recover them

- even at $10 per week