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MARK TIERNAN SOLICITOR ARTICLE ON DEBT COLLECTION

Mark Tiernan Solicitors are experienced in assisting individuals and companies in the recovery of their bad debts.

This country currently going through one of the toughest recessions it has ever had to face. As a result there are a large number of people and companies defaulting on debt payments. Solicitors are the best people to advise in on the recovery of debt and Mark Tiernan Solicitors specialise in debt recovery.

The most important factors to consider are the below mentioned in the recovery of the debt:

Is there a contract?
What is the date of the contract?
What was the contract for?
What date did the debt become due and owing?
Was the creditor a company or an individual?

The monetary jurisdictions of the courts are as follows:
District Court- debts up to €6,348.69
Circuit Court- debts greater than €6,348.69 and up to €38,092.14
High Court- debts greater than €38,092.14
Commercial Court- on application, commercial disputes over €1,000,000

Once the judgement is obtained there is no guarantee that the debt will be paid and thus in some circumstances you will have to enforce the judgement. You have six years to enforce the judgement but this time limit may be extended in certain circumstances. Judgements attract post judgement interest at a rate of 8%.

Please see the forms of enforcement below:

- Committal Order

- Sheriff

- Garnishee Orders

- Receiver by way of Equitable Execution

- Insolvencies- liquidations, receivership and examinership

- Judgement Mortgage, well charging order and order for sale.

- Bankruptcy

- Examination and instalment order,

- Registration and Publication

Committal order procedure

The area of committal has been reviewed by way of High Court judgement and new legislation. Section 6 of the Enforcement of Courts Order Act 1940, whereby a debtor could be imprisoned for non payment of a court ordered instalment, was found to be unconstitutional.
This left a big gap in the enforcement procedure and, in particular, the enforcement of court orders for payments relating to small creditors and family law maintenance orders.

Under the new law, the Enforcement of Courts Orders (amendment) Act 2009 the position now is that, on non payment of a court- ordered instalment, the creditor can apply to the court for a summons directing the debtor to appear before the court.

The Sheriff

If the debtor still fails to appear, the court can issue a warrant for arrest so that the debtor can be brought before the court.
Once a judgement has been obtained, an order may be sent to the sheriff for execution.

Registration of Judgement

The Judgement may be registered n the Registry of Judgements, which is kept in the high Court Central Office, where judgements from the high court, Circuit Court and District Court can be registered.

Ensure that when registering a judgement the judgement has not been satisfied prior to registration. If it has then registration of the judgment could well be defamatory.

Garnishee proceedings

Where a creditor knows that a third party owes the debtor monies, the creditor may apply to the court for an order that the third party pay the creditor that said sums, or as much as is sufficient to satisfy the judgement. However:

- The relationship of the debtor and creditor must exist

- The debt must be enforceable by the debtor, and

- There must be something in existence that the court recognises as a debt

Receiver by way of a equitable execution
This is not unlike the garnishee order.It allows the appointment of a receiver to receive monies payable by a third party to the judgement debtor.

Insolvencies

The main forms of insolvency are: liquidation, receiverships and examinerships for corporations; and bankruptcy and schemes of arrangement for individuals. Before commencement, it is good practice to confirm that the debt is not disputed and that the debtor company has sufficient assets to fund the liquidation procedure.

Judgement Mortgages

Once you have obtained a judgement, it may be registered as a judgement mortgage on any property that the debtor has an interest in. It is crucial that ownership of the property is proved.

The judgement mortgage can be further enforced by applying to the court for a well charging order and an order for the sale of the debtors property. A judgement mortgage will normally prevent the debtor from dealing further with the property until the judgement has been satisfied.

Bankruptcy

This procedure is only available for individuals and while it can be initiated without obtaining judgement it is preferable to obtain the judgement first. The aim is to hand over assets, liabilities and affairs of the bankrupt to a trustee or assignee for the purpose of releasing the bankrupts assets, and then distributing the proceeds of sale required to be published by the petitioner as directed by the court.

The Law Reform Commission intends to publish a report on debt recovery later this year. Among many issues they may review is the regulation of debt recovery and enforcement options.

If you have any queries on debt collection please contact Mark Tiernan on 01 6622822