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Debt Collection in Ireland

Debt Collection in Ireland

The amicable procedure in Ireland

Just like in many other countries, member states of the European Union (EU), the Irish legislation stipulates that the first step related to the debt collection process in Ireland refers to the amicable procedure, an option to which a manager can appeal to when he or she has to receive a certain sum of money owed by a debtor.

The debt collection procedure starts according to the provisions of a contract signed between the parties involved and it is usually begun when the deadlines related to a certain payment are overdue. Our team of Irish lawyers who are experts in debt collection in Ireland can offer more details on the legal aspects of the amicable procedures in Ireland.  Amicable debt collection begins by sending notifications regarding the amount due, the deadline for the payment of the debts and the consequences faced by the debtor, if he or she is not willing or able to pay the debt.

When trying to recover a debt in Ireland, it is recommended to receive the legal assistance of an Irish law firm or a debt collection agency. As a general rule, the party that must recover a sum of money, as specified within the provisions of a contract, will need to contact the other party by letter, phone or e-mail. 

Initial notice in Ireland  

Companies in Ireland which must recover a debt under a commercial contract will issue a notice addressed to the party who must pay the respective sum of money. 

The notice will need to contain the following information: 

  • details related to the provisions of the contract;
  • details on the company that must recover the debt;
  • the name and the address of the debtor;
  • the notice should also include details on how the creditor will handle the debt collection procedure; 
  • the date in which the measures will become applicable. 

The legal procedure in Ireland 

If the parties involved can’t reach an agreement through an amicable procedure, the creditor can appeal to the legal procedure of debt recovery. Usually, the creditors will hire a law firm or a debt collection agency in Ireland which can represent them in front of the court. Before the commencement of the debt recovery through the legal procedure, the creditors can address to the liable part and try to agree upon a payment scheme for the due amount, paid in instalments. In the situation in which the debtor refuses to pay the debt and the creditor is interested in recovering the amount due as soon as possible, he or she can start the legal procedure by addressing to an Irish court. 

Debt collection in an Irish court  

The court where the petition is filed is elected according to the value of the due amount: the District Court hears cases where the amount due does not exceed EUR 15,000; the Circuit Court will accept cases with a maximum value of EUR 75,000 and the High Court when the amount due is over EUR 75,000. 

As a general rule, debt recovery cases are addressed to the District Court where the debt person filing for the trial is living. At the same, the Irish legislation also stipulates that such cases can be handled by the District Court where the contract was signed by the two parties. 

The debtors have usually two options, after the creditor has issued a claim stating the reason for addressing to the court: 

  • the case can be annulled if the debtor pays the respective sum of money within 10 days since the notice was issued;
  • the debtor can use the appearance and defence form to dispute the respective claim.

If there is no answer from the debtor within 7 days, the creditor will issue a Civil Bill to the court, designating the plaintiff’s and defendant’s names, the nature of the case, the value of the debt and other aspects, which can be drafted with the legal assistance of an Irish attorney.

A Notice of Intention to Defend can be elaborated by the debtor once the Civil Bill has been served. The debtor is allowed to a period of 21 days to contest 
the Civil Bill and if no answer is received, then an Affidavit of Debt is issued to the client. This is an official document signed by the creditor and returned to the court. After this step is completed, the enforcement procedure may be initiated. 

The process of reaching a verdict may take 3 months for a standard case, out of which the pre-legal actions represent 2 weeks. Enforcement is often a very 
prolonged procedure and may take from 6 to 12 months. The costs of a legal action may vary from case to case but usually some legal costs can be charged to the debtor. The judge usually takes this decision and approximately 60 – 70% of all costs are supported by the debtor after deciding that he or she must pay the debts which are subject to the process.

EU Late Payment Directive in Ireland

The late payment in commercial transactions is regulated by the 2011/7/EU Late Payment Directive enforced by the European Union in February 2011. The 
regulation was established in order to protect the European businesses; at the same time, the law refers especially to the protection of small and medium 
enterprises. The legislation became compulsory for the member states in 2013 and its main provisions refer to the following:  

  • as a general rule, public institutions are required to pay for a goods and services contract in a period of time of 30 days; however, it is also allowed to pay within 60 days, but only in certain circumstances;
  • companies should pay in a period of 60 days;
  • the statutory interest is set out at minimum 8%, and it is applied when the payment passed its due date. 

However, the legislation stipulates that each country may add other regulations which would be favourable to creditors; our debt collection lawyers in Ireland can provide you with more information about this directive. Debt collection in Ireland is also regulated by the Consumer Credit Act 1995, as well as the European Communities Regulations 2010, in the case of natural persons who owe various sums of money for a purchase they have completed in Ireland. 

Steps in the procedures of confiscation of assets in Ireland

Before the seizure of assets becomes effective or a decision in this sense is made, it is important for several procedures through which the assets can be recovered without a court order. The main stages in a civil case which includes debt collection in Ireland include:

  1. the investigatory stage during which an officer of the court is appointed to verify the assets of the defendant (the debtor in a debt collection case);
  2. the pre-trial restraint stage during which the officers cannot seize any of the assets of the debtor before a trial;
  3. the procedure leading to the seizure of assets which implies the trial during which the decision is made by a judge;
  4. the execution of the seizure of assets order which is the actual stage in which the assets of the debtor are confiscated;
  5. the last stage implies the sale by auction or other actions which enables the claimant to recover the debt.

Our debt collection lawyers in Ireland can offer more information on the trial stages which can lead to the seizure of assets of a debtor.

We offer tailored legal advice in debt collection cases in Ireland can help both local and foreign claimants recover any outstanding amounts of money through amicable or court proceedings.

Court orders for seizing assets in Ireland

Companies involved in debt collection cases in Ireland can ask for legal advice and file petitions with the local courts in order to recover any outstanding amounts of money. In case a court order for the seizure of assets is issued, the court will appoint an officer to conduct the verification and execution of the order.

The Criminal Assets Bureau was created in 2002 and at the time it had to deal with investigating the assets held by persons accused of various crimes in relation to the Criminal Code. Later on, the Bureau was assigned more roles and now it can also investigate the assets held by debtors, especially when dealing with bad taxpayers.

Our debt collection lawyers in Ireland can offer more information on the orders related to the seizure of assetsOrders issued by EU courts can also provide for the seizure of assets, however, in this case, the confiscation of the assets will be completed by a Council created under the Council Decision on Asset Recovery Offices.

What are the main ways of enforcing a judgment order in Ireland?

The new Civil Debt Procedure Law provides for several ways of enforcing a court decision in a debt collection procedure in Ireland. These are:

  1. through execution against the goods and various assets of the debtor (an assessment of these goods will be made);
  2. through the issuance of installment orders and committal orders if the former orders are not respected;
  3. through attachment of earnings – the court can dispose for a partial withhold on the debtor’s income;
  4. through a judgment mortgage, case in which the home of the debtor will be seized in order to repay a debt to the bank which credited the debtor;
  5. other ways which can include attachment of debts and personal bankruptcy procedures, which are rarely used.

The recovery procedure can be started by a debt collection agency in Ireland, however, once the case gets to court, it is advisable to ask for specialized support from a lawyer, especially when it comes to the enforcement of the court decision.

Irish courts dealing with debt collection execution orders

When trying to recover a debt through court proceedings in Ireland, it is important to know that creditors can address the District and the Circuit courts. Appeals, however, will be dealt with by the High Court.

All three Irish courts can issue debt execution orders and the decisions can be enforced by a Sheriff or a County Registrar who can complete the seizure of assets (where applicable) without previous notification.

Procedures related to the enforcement of Irish court orders

As mentioned earlier, once the court decision is issued, a Sheriff will be appointed to complete the execution of the respective order. The enforcement of the court order will imply:

  • an assessment of the goods and earnings of the debtor by the Sheriff (based on the complaint of the creditor);
  • the Sheriff can complete the order by going to the debtor’s home, however, he or she must act reasonably when carrying out the order;
  • there are certain items which cannot be seized by the Sheriff, among these clothes or tools used to complete the work activities of the debtor;
  • the Sheriff must notify the court about all the goods seized from the debtor (a list of the goods must also be provided to the debtor);
  • the goods seized by the court can be sold in an auction starting with the third day from the seizure.

In case an installment order is issued by the court, the debtor must comply with it, otherwise risking being imprisoned. Recently, the Irish legislators have provided for personal bankruptcy and our debt collection lawyers in Ireland can offer more information on this procedure.

For further information on the debt collection process in Ireland, please contact our team of Irish lawyers, who can provide legal representation on a debt recovery case.