Sometimes the process of collecting a debt can drag out for a long time. In New Zealand, you generally have just six years to collect from when the debt was created.
As the months and years go by, the chance of a successful collection reduces. It can be a constant burden to consider the debt.
That’s where debt factoring comes in.
Essentially debt factoring is where an agency such as Sentinel Credit Services agrees to purchase the outstanding debt off you for a percentage of the balance of debt.
That debt comes off your books, and any loss is fully written off for tax purposes.
The problem of collection and any risk or loss then becomes ours.
Frequently Asked Questions
Q. What do you pay out when factoring debt?
A. This varies depending on the age and size of the debt. It is typically from 5% to 25% of the balance owed.
Q. Are there any additional charges?
A. No.
Q. What if the debtor pays us after you have purchased the debt?
A. All monies paid legally belong to Sentinel Credit Services and you must pass them onto us without deduction or buy back the debt.
Q.Do I have to sign a contract?
A. We send you an email which you reply to confirming the sale and purchase of the debt.
Q. How old can the debt be?
A. Generally, we only buy debts less than four years old.
Q. Is there a minimum debt you will buy?
A. We will factor debts as little as $250.
Q. Is there a maximum debt you will buy?
A. We review all debts above $250 on a case by case basis.
Q. What if the debtor disputes the debt?
A. You will be required to purchase the debt back.
Q. How can we find out more about debt factoring?
A. Call us on 0800 110 727 for information or contact us via our online form