Debt Collection in Ireland
Due to the recession the Courts have been inundated with claims for monies owed. Obtaining the court order against the debtor is usually relatively straightforward. Claimants frequently think this automatically guarantees payment of the debt. Having obtained the Judgement, which is the order signed by the court directing the debtor to pay up, the extraction of the funds from the debtor can prove to be challenging and the exercise does not always yield a result.
There are a number of options available to enforce the Court order:
The Court Order can be sent to the Sheriff who will issue a warrant to seize the goods of the debtor if payment is not forthcoming. However, many people’s assets consist of house contents and motor car only. As the contents are usually jointly owned with the spouse as part of the family home the Sheriff cannot touch them. The motor car is more often than not owned by a finance company and is therefore also out of reach of the Sheriff. Unfortunately, the Sheriff usually gives a few weeks’ notice of his intention to seize goods and this gives the debtor ample opportunity to hide any assets that may be at risk such as cars, boats etc. The Sheriff has no power to seize a person’s house. In these circumstances the Decree or Court Order will be sent back to your debt collection solicitor marked with the words ‘Nulla Bona’ meaning ‘No Goods’.
Having obtained the court order or Decree for payment, and the Sheriff having been unsuccessful with efforts to seize goods, the debtor may be summoned to court to give an account of his income and outgoings and assets and liabilities. Your debt collection solicitor will have the opportunity to cross examine the debtor in the witness box of the court and if the Judge takes the view that he can afford to repay the debt then he will make an ‘instalment order’ directing payment of a fixed weekly or monthly sum until the liability is discharged in full. Getting the debt repaid ‘on the drip’ is not very satisfactory however in circumstances where there may be no available assets or cash to seize it is the only viable alternative and is a cost effective way of debt collection in Ireland.
If you have deep pockets and feel that the debtor is holding out on you, in other words that he or she is able to pay but deliberately withholding payment to test your metal, then Bankruptcy or a threat of Bankruptcy can often be very effective. A demand letter is sent giving twenty one days to pay and then a Bankruptcy summons is issued in the High Court. Payment will often be made before the hearing date if the funds are available to the debtor. However the procedure can be expensive and the liability would need to be substantial before considering this process.
This is a strategy that will only be available if the debtor owns a property in which there is sufficient equity to satisfy the debt. A mortgage can be registered against the title and an application may be made to court to sell the property on foot of the mortgage. It is more effective if registered against an investment property rather than a family home as the interests of the spouse do not have to be considered by the court. Unfortunately it is a long drawn out process however ultimately the debt is likely to be recovered albeit at a cost to you as the debtor will not be obliged to pay all your legal costs.
Winding Up Petition:
In the case of a company debtor this can be very effective. A twenty one day warning letter is served and then if payment is not made a Petition to wind up the Company is issued in the High Court. Usually it will be allocated a preliminary hearing date within a few weeks and the judge will direct an advertisement be placed in a national newspaper. If the funds are available then payment will be made or alternatively a schedule of payments may be agreed in return for adjourning the petition.
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