Otago debt collectors are busy as the number of businesses calling on them to make people owing them money pay up has risen by up to 30% in the past year.
New Zealand Credit and Finance Institute president and Debtworks (NZ) director David Young said the institute's members had noticed "quite pronounced" increases in the time it was taking people to pay their bills.
"That's across all industries. It is going up quite sharply in the building and construction area - it's just flying away. We've also noticed it's going up in the professional services [accountants and lawyers] industry.
"Otago-wide, there has been a 25%-30% increase in debts loaded. That's not far off the national average."
Mr Young said there had also been a 50% increase in inquiries from businesses about retrieving debts, and his company was taking on more staff to cope with the demand.
The situation had striking parallels with the 1987 stock market crash, but it was not the busiest debt collectors had been in the past 20 years.
"While payment from consumers is down slightly, it's nowhere near as much as expected, because consumers are more hesitant about spending. They are a bit more cautious about incurring debt.
"Now is not the time to let bills drift on without being paid. Eighteen months ago, it didn't matter so much. But now, the risk of total loss is much higher."
Commissioner of Inland Revenue Robert Russell said the economic climate was expected to make it increasingly difficult for many individuals and businesses to pay their tax bills.
As debt levels rose, many people tended to push their tax bills down the list of priorities.
Mr Russell said people should comply with tax requirements, because missed payments attracted penalties and interest, which would compound their financial problems.
"We understand that economic conditions are tough for many people and businesses at the moment.
Many people may be OK now, but concerned that their finances will get worse in future and they will have trouble meeting their obligations," he said.
"It's vital that they get in touch with us and let us know that they are having problems."
Mr Russell said if people contacted the IRD early, they had some options, depending on their individual situation.
Tax payment by instalment was one option - the number of people paying their tax bill in instalments grew 21% in the year to May 2009.
The department would only take liquidation or bankruptcy proceedings as an absolute last resort, but would do so if all other efforts to recover the money owing failed, he said.
Mr Young said the present situation was not all "doom and gloom".
Many of his clients had changed their in-house approval and ledger-management procedures, which meant they would be more "financially robust" when they emerged from the recession.
He could not speculate on whether the increase in demand for debt collection would continue.
"I would like to think we are at the bottom of the curve. But, really, we just don't know at this stage."
