Get informed about the legal process, to select the best options for you.
I always advise clients of two important things early on. Firstly, that obtaining a court order against someone who owes you money is generally a straightforward and quick process. This is especially true if you have good paperwork to prove the debt and it is not contested. However, obtaining an Order from the Court is usualy only half the battle. The Order states the person or company owes the debt to you, your scale legal costs and interest at 2% per annum. Often, it does not result in any payment. This can be very frustrating for people as it means they must enforce the Court Order against the debtor.
Secondly, while the Court will award legal costs to you, these are set fees which, often do not cover the total costs involved. This means that even if you are successful in obtaining Judgment and costs, you will have to contribute to your legal costs. Costs will be lower for debt collection in the District Court, than the Circuit Court. You should discuss this with your debt collection solicitor as early as possible to ensure that you are not throwing good money after bad. You should also discuss the options available with a debt collection solicitor to enforce the Court Order and the costs of each application.
The District Court has jurisdiction for debts up to €15,000
The Circuit Court has jurisdiction for debts between €15,000 and €75,000
The High Court has jurisdiction for debts over €75,000.
Often, if the claim is only slightly over a Court’s jurisdiction, I will advise a client to elect the lower jurisdiction. This will reduce legal costs and time frame for the matter. So, for example if a person is owed €16,000, that person can elect to enforce only €15,000 of the debt in the District Court.
An action must be brought within six years from the date the debts arises. If there has been part payment or acknowledgment to the debt, this may extend the time frame. It is advisable to enforce the debt as soon as possible.
The options available to enforce the Judgment include:
- Publication of the debt in the Registry of Judgments in the Central Office of the High Court. It is then available to companies to publish in a variety of gazettes and databases.
- An application can be made for a Garnishee Order. This Order directs that debts to the debtor are in fact paid to the creditor to discharge the debt due to the creditor, as per the Court Order. For example, if a debtor is due to obtain money from a personal injury or insurance claim or payment from a third party, the creditor can apply for those funds to be paid directly to the creditor.
- Obtain an Instalment Order from the Court. If an Order is made and the debtor fails to pay as per the Order, then a further application can be made to have the debtor committed to prison. However, this is rarely used and when The Civil Debt (Procedures) Act 2015 is commenced, it will abolish this procedure.
- Application to the Sheriff to seize and sell goods to the value of the debt (together with costs and interest). The assets must be in the name of the debtor and within the jurisdiction of the Sheriff.
5. A judgment can be registered as a Judgment Mortgage against any property belonging to the debtor. If the property is owned jointly, a Judgment can be registered against the interest of one party only. In this case, if the debtor dies the joint owner takes their share free from the Judgment Mortgage. To avoid this, an application must be made to sever the joint tenant and create a tenancy in common. Furthermore, to force a sale of the property, after registration of the Judgment Mortgage, a further court application is required. A Judgment Mortgage lasts for 12 years, after which it is unenforceable against the debtor’s property.