Enforcement of Judgments in the District Court in Ireland

So, you have obtained a judgment against a debtor and now you wish to enforce it in the District Court or you have had a judgment given against you for a debt and you are confused as to what happens next.

It is important to understand that there is no limit on the jurisdiction of the District Court when it comes to enforcement of a Judgment so Judgment/Decree obtained in the District Court, Circuit Court or High Court can be enforced through the District Court procedures.

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What happens next? How is the judgment enforced?

Serve the Defendant

A Judgment or Decree is simply a statement of the amount owing but it is no of itself an order to pay or an execution order.

So the first step after obtaining judgment is to serve it on the Defendant.

Register the Judgment

The Judgment can be registered in the Central Office of the High Court and published in trade gazettes such as Stubbs. Sometimes the threat of publication of a judgment can encourage a debtor to attempt to come to some arrangement.

Examination of the Debtor as to Means

Examination of the debtor is a procedure where the Debtor can be summoned to the District or High Court to be examined as to his/her assets and property. It is worth noting that the examination procedure cannot be carried out against companies, only natural persons.

For examination to take place a Sheriff will have to have returned “no goods” or “nulla bona” on the execution order or you as creditor will have to swear an affidavit that you believe the Debtor has no goods.

The solicitor for the creditor will issue a summons for the attendance of the debtor and if served by hand must be served at least 14 days before the Court date; if served by registered post it must be served 21 days before the hearing date.

 

The summons will have attached to it a Statement of Means which must be filled out by the debtor and lodged in the District Court office at least 1 week before hearing.

 

The solicitor for the creditor will need to lodge

1. The original Decree

2. An affidavit of residency confirming that the debtor lives where the summons has been served

3. A certificate of amount due.

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Instalment Order

It is up to the Judge then to decide how much the debtor should be paying based on the statement of means and will make an order called an Instalment Order requiring the debtor to pay a fixed amount monthly or weekly. However if the debtor has no means then an instalment order is very unlikely to be made.

Debtors’ Statements of Means are generally accepted by District Court Judges unless you as creditor can show that the Statement is inaccurate.

This instalment order must then be served on the debtor and will remain in force for 12 years from the date that Judgment was granted.

 

If the instalment order is not complied with the creditor can issue a Summons for Failure to Comply with An Instalment order.

 

This next appearance in Court by the Debtor may lead the Judge to granting a Committal order committing the debtor to prison. However since the Caroline McCann/Monaghan Credit Union case it is much more difficult to commit a debtor to prison and the Court must be satisfied that the Debtor will not pay as opposed to being unable to pay.

After Instalment Order

If you are successful in obtaining an instalment order against the Debtor you have a number of options in attempting to enforce your judgment/decree.

Methods of Enforcement

The most common methods of enforcement of your judgment/decree include

  • judgment mortgage
  • execution order
  • attachment and commital
  • garnishee orders (attachment of debts)
  • appointing a receiver
  • order charging a partner’s interest
  • charging order over stocks and shares
  • sequestration

.

We will take a look in greater detail at these methods of enforcement in another article but the most common method and perhaps the most effective if the debtor is a property owner is to register a Judgment mortgage.

Judgment mortgage

You can, as the creditor, also register a Judgment mortgage on the debtor’s property, if he is the registered owner. The power of sale of the property though on foot of a judgment mortgage can only be exercised through the courts.

Filed Under: Debt Problems | Bankruptcy Tagged With: , , , ,

The Civil Summons Procedure in Ireland

The Civil Summons procedure is the method of issuing legal proceedings in the District Court. The District Court deals with claims with a value up to €6,348.69 (IR£5,000) and many people in Ireland will have been served with, or served, a Civil Summons in the last 18 months to pursue a debt.


Debt collection in Ireland has become increasingly active and pressurized in the last two years and an understanding of how to collect a debt or how to defend such an action is important to avoid having a judgment granted against you.

If you want to pursue a debt for less than €6,348.69 you can issue and serve a Civil Summons in your District Court area or in the District Court area of your debtor. Issuing a Civil summons in Dublin is slightly different than outside of Dublin.

Issuing a Civil Summons

To issue a Civil Summons in Dublin you simply bring your Summons along to the District Court office in the Four Courts. You will need two copies and one will need to be stamped with stamp duty of €20.

The District Court office will stamp your summons with a date. This date is called the return date which simply means that you appear in court on that date and will be given a date for the hearing of your claim.

Service of a Civil Summons

It is necessary though to firstly serve the Summons on your Debtor and you do this by serving a copy of  the Civil Summons on them.

Service of any summons or legal document is determined by the rules of the various courts. Generally if you are suing a company you serve on the registered office of the company by ordinary post.

Service on an individual can be carried out by registered post or by personal service.

All of the rules in relation to service of legal papers and precedents for drafting your legal papers, such as your Civil Summons, can be found on the courts website at http://www.courts.ie

Once you have served your summons the debtor must file a Notice of Intention to Defend the proceedings in the office of the District Court. Once they do this your case will appear in the Court’s list on the return date and will be given a hearing or trial date.

If no Notice of Intention to Defend is filed by your debtor then you will be free to obtain a judgment against your debtor without any further court appearance.

If this is the case then one you get your Judgment or Summary Decree you send it to the Sheriff of the District court area for him/her to try to recover the value of your Summons.

Clearly if you are the recipient of a Civil Summons for A Debt then you should either make sure to fill out the Notice of Intention to Defend form and give it back into the District Court office and a copy to the person who is suing you (or their solicitor).

If you are not comfortable doing this yourself then you should call to a solicitor who will look after it for you.

But however you decide to act, do not bury your head in the sand if you are served with a Civil Summons or you run the risk of having Judgment granted against you in your absence.

Filed Under: Debt Problems | Bankruptcy Tagged With: , , , ,

A New Beginning in Ireland-The Saviour of Hard Pressed Home Owners?

Just this week a new group of legal professionals concerned citizens launched “A New Beginning” for homeowners who are in fear and real danger of losing their homes as a result of being unable to pay.


New Beginning is made up of barristers, solicitors, an economist and some concerned citizens who wish to test the boundaries of the duty of care owed by lending institutions to it’s borrowers.

Essentially New Beginning will take on test cases where people are in danger of losing their houses because they can not make the mortgage payments and can not afford legal representation.

There is no doubt that banks and finance houses do owe a duty of care to it’s customers but the level or extent of this duty of care has never been clearly defined. New Beginning estimate that there are currently 36,000 mortgages in arrears by 3 months or more and 17,000 simply can not meet their repayments.

PLEASE NOTE: This site is NOT the website of the New Beginning organisation-they can be contacted here..

email: info@newbeginning.ie

Tel: 01 – 8719499

Address: Suite 123, The Capel Building, Mary’s Abbey, Dublin 7

www.newbeginning.ie

New Beginning is led by David Hall, Ross Maguire Senior Counsel and Vincent P. Martin B.L. and the group intend working on suitable cases pro bono (free).

They are currently looking for suitable cases to take on and they provide a questionnaire on their website at www.newbeginning.ie so that people can apply to have their case defended by their pool of legal professionals who are giving their time and services for free. So currently they are looking for people in Dublin who face legal proceedings with the danger of losing their home and who do not have a solicitor to contact them through their website.

It is intended that this service will be rolled out nationwide in the coming months. It is a laudable aim of this group and it will certainly be interesting to see how they get on with their test cases and the benefits, if they are successful, will be experienced by many people facing the prospect of losing their home.

Filed Under: Consumer Rights, Debt Problems | Bankruptcy Tagged With: ,

How To Enforce A Foreign Judgment In Ireland

When you obtain a foreign judgment against an Irish debtor you will invariably want to enforce that judgment against the assets of the debtor in Ireland, if he has any.


There is an important distinction to be made at the outset though-if your judgment was obtained in an EU country then there is a procedure to have your judgment recognised and enforced in Ireland but if your judgment was obtained against an Irish debtor in a non EU country, then there is no way of having that judgment recognised in Ireland.

EU Judgments

If your judgment is an EU obtained judgment then the Brussels I regulation provides that your judgment will be recoginsed in all EU member states. To enforce it though you will need to go through a simple procedure involving making an application to the Master of the High Court in Ireland for a Declaration of Enforcability. This is a pretty straight forward procedure and once you have obtained your Declaration then your foreign judgment will have the same effect and weight as if it had been obtained in the High Court in Ireland.

Read this post about enforcing EU judgments in Ireland.

Non EU Judgments

If your judgment was obtained in a non EU country then to enforce it you will need to go through the Summary Summons procedure of the High Court in Ireland as if it was a debt incurred in Ireland.

For a more detailed look at enforcing non EU judgements, for example the United States, read this.

For an overview of our services for international clients click the link.

Filed Under: Debt Problems | Bankruptcy Tagged With: , , ,

Bankruptcy Ireland

Bankruptcy Ireland

Filed Under: Debt Problems | Bankruptcy Tagged With: ,

Bankruptcy Ireland-Bankruptcies In Ireland

Bankruptcy is a commercial reality facing many small business owners in Ireland today.And the number of bankruptcies is increasing dramatically.


Bankruptcy is a process where the property or assets of an individual, who is unable or unwilling to pay their debts (called a debtor), is transferred to a person given charge of the property by the High Court (called a trustee) to be sold.

When the property or assets are sold, the costs, expenses, court fees and certain priority debts are paid. After this, the net proceeds are distributed to those owed money (the creditors).

In nearly all bankruptcy cases, the Official Assignee in Bankruptcy, an officer of the Courts Service, is the trustee to whom this property is transferred. This is the person who administers the estate of bankrupt persons.

Bankruptcy proceedings are brought in the High Court. The application for a bankruptcy order (as well as any other application for the Bankruptcy list of the High Court) is filed in the Office of the Examiner of the High Court. Following this, the proceedings are dealt with by the High Court.

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Declaring bankruptcy

The High Court makes a debtor bankrupt either at the request of a creditor or at his own request. In either case, this request is made in a document called a bankruptcy petition. This must be filed in the Office of the Examiner of the High Court.

When the petition is filed, the petitioning creditor or debtor undertakes to the court to advertise notice of the bankruptcy in various newspapers. The advertisement must also contain details of the place, date and time of the next time this is before the court (called the statutory court sitting).

The petitioner must also lodge €650.00 towards the costs and outlays of the bankruptcy in the Official Assignee’s Office and give an undertaking to the Official Assignee as to the further costs and outlays which may be incurred.

Bankruptcy Petition by a debtor:

A debtor may bring a petition for his/her own bankruptcy where he/she is unable to pay debts to creditors and where his/her available estate (for example assets and property) is sufficient to produce at least €1,900.00.

Bankruptcy Petition by a creditor:

A creditor may petition for bankruptcy against a debtor where the debtor has committed an act of bankruptcy within the previous three months. The most common acts of bankruptcy relied upon by a creditor are:

(a) failure by the debtor to comply with a bankruptcy summons requesting payment of a specific sum due, within fourteen days from service of the summons on the debtor, and

(b) the making of a return of no goods in respect of the debtor, by the sheriff or county registrar.

For a creditor to be entitled to petition the court to make a debtor bankrupt, a number of conditions must be met. These include :

  • the petition must be presented within three months of the act of bankruptcy,
  • the amount of debt owed must be set out in an affidavit,
  • the debt owed must be at least €1,900.00,
  • the debtor must be either resident in the State or within a year prior to presentation of the petition, have ordinarily resided, had a dwelling house or place of business, or carried on business within the State.

The creditor’s petition for bankruptcy must state whether any security (for example, a mortgage or a charge) is held by them in respect of the debt. If so, the creditor must indicate whether he/she intends to give up the security for the benefit of other creditors orput a value on their security.

The consequences of bankruptcy

Bankruptcy impacts not only on the person made bankrupt, but also on their creditors, as well as others, including their family members or people who have a commercial relationship with the bankrupt.

The bankrupt
Following adjudication (the court order making you bankrupt) a notice of this is published by the petitioning creditor or you (if you have made yourself bankrupt) in one national and one local newspaper.

This notice will also contain information about the next statutory court sitting. A local newspaper is one which is published in the area where you live or carry on business.

Creditors may appear at the statutory court sitting and may make a claim under the bankruptcy. Other notices are also published at various stages of the bankruptcy, such as advertising for creditors and notice of discharge of bankruptcy.

A bankruptcy register is maintained in the Office of the Examiner of the High Court and searches can be made against this register.

Can I stop the bankruptcy?

You may apply to the High Court within 3 days of the service of the bankruptcy order on you, giving reasons why you should not have been made bankrupt. This is called a show cause application.

What am I required to do when I am made bankrupt?

You must co-operate fully with the Official Assignee’s office in all matters relating to your bankruptcy. You must inform the Official Assignee if you change address.

Initially you must attend for interview with the Official Assignee. You must also file a Statement of Affairs in the Office of the Examiner of the High Court.

This document sets out all of your financial details including assets held and all amounts owed by you. The statutory court sitting will only be passed in the High Court when your Statement of Affairs has been filed.

You also have other legal obligations in connection with the administration of your estate and assets. This includes:

  • the delivery of your accounts or papers to the Official Assignee when requested,
  • the delivery of your title deeds to property and any other possessions to the Official Assignee,
  • assisting the Official Assignee in the administration of your estate, and
  • disclosing any property acquired by you since the date of your bankruptcy order to the Official Assignee.

Where you fail to co-operate with the Official Assignee, the High Court may summon you to examine you under oath.

What happens to my property when I am made bankrupt?

All property held by you when you are made bankrupt vests in the Official Assignee for the benefit of your creditors.

The role of the Official Assignee is to sell or otherwise dispose of this property (called realisation) and distribute the proceeds to your creditors. A vesting certificate is lodged in the Office of the Examiner of the High Court and with the Property Registration Authority.

This document records the interest of the Official Assignee in any property held by you at the date of adjudication. It means that you cannot sell or use this interest in the property as security to take out a loan.

The only property that does not vest in the Official Assignee is essentials up to a value of €3,100.00, or more if the High Court allows. Any property you acquire after you are made bankrupt, transfers to the Official Assignee, if and when the Official Assignee claims it.

What about property I own abroad?

Under EU legislation, (EU Insolvency Regulations 2002) bankruptcy proceedings in Ireland may be recognised as proceedings in most other EU member states. In most cases, this should allow the Official Assignee to realise such property for the benefit of your creditors.

Does bankruptcy have implications for my salary and pension?

Yes, the High Court may appropriate your salary or pension for the benefit of your creditors. However this is subject to any provision the High Court may make to meet your family responsibilities and your personal situation.

Can I operate a bank account while I am bankrupt?

Yes, you can operate a bank account. However if you obtain credit of €650.00 or more without disclosing your bankruptcy, you are guilty of an offence.

Can I still trade while I am bankrupt?

Yes, as long as you trade in your own name. If you trade in a name other than that in which you were made bankrupt without disclosing this name, you are guilty of an offence. You must notify the Official Assignee of any business or trade in which you engage.

Can I manage a company or become a director of a company?

No, under the Companies Acts it is an offence for a bankrupt to act in various capacities in relation to a company. These include director, auditor, manager, liquidator or receiver of a company.

Can I seek employment while bankrupt?

Yes, and you can continue in current employment or seek employment.

Can I travel outside the jurisdiction?

There is no outright prohibition on you travelling abroad but you should inform the Official Assignee if you intend to do so. You may be arrested if it appears to the High Court that you may be leaving the State in order to avoid the consequences of your bankruptcy.

Are there other consequences of bankruptcy?

Yes, bankrupt persons are not entitled to hold elected representative office, in local authorities, in the Dáil or the Seanad.

Are there alternatives to being made a bankrupt?

Yes, a debtor may enter a voluntary arrangement with their creditors to settle debts due to them and to avoid bankruptcy or other proceedings against them. Arrangements made outside of the control of the High Court tend to be less costly in the long run.

Alternatively, a debtor can apply for an arrangement under the protection of the High Court. This is where a debtor asks the High Court for protection against proceedings to give them time to present a proposal to their creditors.

This proposal could be to pay a dividend (normally a percentage of the amount owed) on their debts or to transfer property to the Official Assignee to be sold and the proceeds distributed among their creditors. The proposal must receive the support of at least sixty per cent in number and value of the unsecured creditors voting on it to succeed. The costs, court fees, expenses and preferential debts must also be paid in full.

I have been discharged from bankruptcy; will my name be removed from the register?

No, the Register is a record of all bankruptcies, including those that have been discharged. A person searching the Register is told the status of the bankruptcy (discharged) and the date it was discharged. No information is given about the address of the former bankrupt.

Family of bankrupt

Can the family home be sold?

The bankrupt’s interest in the family home vests in the Official Assignee as with all other property.

However the Official Assignee may not sell the family home without obtaining permission from the High Court. Where the Official Assignee seeks this permission, the High Court may postpone the sale of the family home having regard to the interests of the creditors and of any spouse and dependants of the bankrupt.

We already have a mortgage or have borrowed against this home

Then this is a secured loan against the property and the Official Assignee’s interest only relates to the equity remaining in the property.

I jointly own the family home with the bankrupt, what about my interest?

Where the bankrupt owns property jointly with a spouse or partner, the bankruptcy causes the joint ownership to be split. The Official Assignee and the non-bankrupt co-owner then hold separate interests in the property.

As a bankrupt can still earn a living, what about our income?

The Official Assignee may apply to court for the appropriation of part of the bankrupt’s salary, income or pension. If the High Court directs any deduction to be made, it may have regard to the bankrupt’s family responsibilities and personal situation.

Social welfare and unemployment payments are not liable to appropriation.

Commercial relationship with a bankrupt

The following are some common examples of third parties dealing with a bankrupt.

Property owned jointly with a bankrupt

Where a person owns property jointly with a bankrupt, the bankruptcy splits the joint ownership. The non-bankrupt co-owner and the Official Assignee then hold separate interests in the property.

Property transferred by the bankrupt

Bankruptcy has legal implications for property transfers and possibly sales where the bankrupt entered into such transactions within certain time limits prior to the bankruptcy.

Partnerships

A partnership where the bankrupt is a partner is dissolved by the bankruptcy. This is unless the terms of the partnership provide for it to continue.
Creditors

What can I do if a bankrupt owes me money?

You cannot use normal remedies (for example, execution, instalment orders and registration of judgment mortgages) to secure payment of your debt if the money is owed at the date of bankruptcy.

You must make a claim in the bankruptcy for payment.

Will I automatically be paid the amount owed to me?

Only when funds are available to the Official Assignee to distribute. In addition, all creditors must prove their debt. This means they must provide evidence of their debt to the Official Assignee, for example, invoices, bank statements, judgment orders or affidavit of debt.

An advertisement for creditors will be placed in newspapers during the bankruptcy process. This asks creditors to submit proof of their debt to the Official Assignee.

But creditors do not have to wait until the advertisement – they can send their proof to the Official Assignee before that date if they wish. Dividends to creditors will only be paid after this advertisement appears and a proof of debt sitting is held by the Official Assignee. This is where the Official Assignee decides if a debt (or the amount of a debt) is admitted.

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All creditors are entitled to examine the proofs of other creditors.

Only debts owed on the date of adjudication are admitted under the bankruptcy. The High Court decides on disputed debts. This is where the bankrupt and the creditor do not agree on the amount owed or the amount admitted by the Official Assignee.

Once my debt is admitted will I be paid in full?

Not necessarily, this depends on a number of factors:

  • the amount of funds available for distribution
  • status of your debt,
  • value of the bankrupt’s estate,
  • method of discharge.

Do all creditors have the same standing in the bankruptcy?

No – there are different categories of creditors and their standing in a bankruptcy depends on whether they hold security for their debt or not. Once a debtor is made bankrupt, the petitioning creditor ranks equally along with all the other unsecured creditors. However the costs of the petitioning creditor must be paid before a bankruptcy is discharged.

What is a secured creditor?

A secured creditor holds security such as a mortgage or judgment against a property owned by the bankrupt.

The secured creditor can rely upon this security and sell the asset comprising the security. They must account to the Official Assignee in respect of the sale and may claim for any amount (if any) still owed following the sale.

After this and payment of any other secured claims, the secured creditor must pay any surplus to the Official Assignee and/or others having an equity in the property. There can be a number of creditors holding security against a single property.

Alternatively, the secured creditor may abandon their security and make a claim as an unsecured creditor for the entire debt.

What is a preferential creditor?

A preferential creditor is a creditor whose debts have priority for payment before other creditors. These include taxes, rates and certain kinds of employee claims and benefits. These must be paid in full before a bankruptcy is discharged.
What is an unsecured creditor?

An unsecured creditor does not hold any security, for example, trade creditors and other business debts. They rank equally with other unsecured creditors.

Discharge from bankruptcy

How long does bankruptcy last?
Anyone who is made a bankrupt remains a bankrupt, even after death, unless or until they are discharged by the High Court. There is no right to automatic discharge.

How is a person discharged from bankruptcy?

A bankrupt may be discharged from bankruptcy in a number of ways. No bankrupt can be discharged unless there are enough funds to pay:

  • The costs of the Official Assignee,
  • High Court fees,
  • The costs of the petitioning creditor,
  • The preferential debts of the bankrupt.

When someone is discharged from bankruptcy, any funds or properties remaining with the Official Assignee are returned to the former bankrupt.

(i) Discharge after payment of debts in full:

This is where the bankrupt’s creditors are paid in full. If the High Court so allows, interest may also be payable. Normally, interest is only paid where surplus funds are available.

(ii) Discharge with the creditors’ consent:

This is where all of the bankrupt’s unsecured creditors consent to the discharge.

(iii) Discharge after making composition with the creditors:

This is where unsecured creditors agree to accept payment of a certain percentage of their debt in settlement of the full amount. This must be supported by at least sixty per cent in number and value of those creditors who vote at a sitting of the High Court for this to be accepted. The bankrupt must provide the Official Assignee with sufficient funds to make this settlement and pay his/her unsecured creditors. This is called an Offer of Composition.

(iv) Discharge after paying fifty cent in the Euro:

This is where all of the bankrupt’s property has been fully sold or disposed of and his/her creditors have received fifty cent in the Euro on their debts.

(v) Discharge after twelve years:

This is where the bankruptcy has lasted for twelve years and all of the bankrupt’s property has been fully sold or disposed of. The court must be satisfied that the bankrupt has disclosed any property acquired since his/her bankruptcy and that it would be reasonable and proper to discharge the debtor from bankruptcy.

Bankruptcy Register

The register is a record of all bankruptcies, including those that have been discharded.

However a person conducting a search against the register is told only the status of the bankrupt ‘discharged’ and the date it was discharged. No information is given about the former bankrupt.

Bankruptcy law

The main provisions of bankruptcy law are contained in the Bankruptcy Act, 1988, the Bankruptcy rules and forms, Order 76 and Appendix O of the Rules of the Superior Courts, the Deeds of Arrangement Act, 1887 and the decisions of the courts.

The court fees payable in bankruptcy and arrangement matters are contained in the Supreme Court and High Court Fees Order.
Bankruptcy searches

At present searches of the Bankruptcy and Arranging Debtor Registers can only be conducted by attending in person at the Examiners Office, 2nd Floor Phoenix House, Phoenix Street North, Smithfield, Dublin 7. The fee per search is available in the Rules & Fees section. Please note this fee is also applicable when the search returns a negative result – that is, there is no entry matching the search criteria on the registers.

Bankruptcy information

If you have any enquiries about a particular bankruptcy or arrangement matter, you should contact the Office of the Official Assignee or the Office of the Examiner of the High Court.

All enquiries about court orders or applications for the bankruptcy list of the High Court should be directed to the Office of the Examiner of the High Court.

To Avoid Bankruptcy

1. Reduce your expenditures.
Analyze what are your needs and wants and segregate the two. Cut off expenses for things that you can live without.

2. Negotiate with creditors.
If it is possible, take your way out of the deadline and ask for a deadline that would work better for both of you. You can also ask them to limit your liability to a certain amount in return for prompt payment.

3. Resort to Debt Restructuring.
This may be obtained through court order or out-of-court.

4. Consolidate debt.
Apply for a loan that has lesser interest rate and pay outstanding loans. This will replace many payments with one monthly payment to one creditor.

Filed Under: Debt Problems | Bankruptcy Tagged With: , , , , , , , , , , ,

Debt Collection In Ireland-Debt Collections

Debt collection in Ireland is a serious problem for many small business owners.

And a working knowledge of the enforcement procedures that are available for collection of debt in Ireland is an important asset for any small business owner.


Debt collection is a topical issue at the moment for many small businesses and entrepreneurs. Questions which crop up most often include-

How do I pursue a debt?

Why can I not issue debtor proceedings for rent owed for my house?

Can I issue debt proceedings in the District Court myself?

What should I do when I receive debt collection letters?

What is the best way to deal with debt collection agencies?

Should I use a debt collection agency when trying to collect a debt?

Judgment mortgages?

Where to bring enforcement proceedings for debt collection?

Generally where the creditor lives of carries on his business. The district court will be the venue for sums less than €6,348.

District Court proceedings (sums less than €6,348)

Where you are owed a sum of less than €6,348 and have exhausted your debt collection procedure of issuing demand letters and are clearly having no success the next step in the debt collection process is to issue and serve a Civil Summons claiming your debt on your creditor.

If you then receive no letter of intention to defend the summons then you are free to apply to the District court office, filing the correct documents, for a summary decree. This simply means that if the person who owes you the debt does not defend your claim or contest the amount, then you can get a summary decree from the district court which certifies the debt that is owed to you.
The documents you need to file in this application are-

1. An affidavit of debt sworn by yourself or by someone on your behalf ( eg company accountant, company secretary)
2. A completed decree form

If the District court is satisfied to enter judgment then you will get your signed decree from the District court and this can be sent to the Sheriff for enforcement. Your debt collection process can be helped greatly if you call to your local district court office and speak to the staff there.

They are generally very helpful and the whole process of debt collection can be greatly simplified with a bit of effort on your behalf.

Circuit Court proceedings (sums less than €38,092.14)

Again when no defence or appearance is received to your issuing of proceedings(Civil Bill) in your debt collection efforts you are free to lodge the necessary papers in the Circuit Court office to obtain judgment.

The papers to be lodged in the Circuit Court office are more extensive and you really need the help of a solicitor to do so. But because the amount of debt that the circuit court will be dealing with will be up to €38,092.14, then it will be well worth it to get a legal professional on the case.

If the debt is defended and contested then it goes to court hearing and assuming you win an award you can obtain the court order from the County Registrar.

And just like the debt collection procedure for the district court, you can get the sheriff for the area to execute the court order.

High Court (sums greater than €38,092.14)

To carry out your debt collection for sums of this magnitude you must issue a High Court Summary Summons.

Assuming that no appearance has been entered by your creditor then you can proceed to lodge the necessary papers with the Central Office of the High Court judgments section which will allow you to obtain judgment in default of appearance.

This is a technical and demanding process which will require the assistance of a solicitor.

Once judgment has been obtained it should firstly be served on the defendant. Judgments of all courts can then be registered in the Central Office of the High Court and will appear in trade gazettes such as Stubb’s Gazette.

This prospect of adverse publicity can encourage a creditor to pay you promptly.

There are various procedures then for summoning before the appropriate court the debtor for the purposes of ascertaining what property and assets the debtor owns. This is a similar procedure which occurs in relation to bankruptcy.

If and when you obtain a court order or judgment against your creditor in your debt collection process another further step is to obtain a judgment mortgage on some valuable property of the creditor.

Judgment Mortgage

It is possible to register a judgment mortgage on property of the debtor, even the family home. You can then apply to the appropriate court to force the sale of the house and get paid out of the proceeds.

However the courts are reluctant to force the sale of the family home. It is important to realise that a judgment mortgage can be registered on a family home even without the consent of the non debt owing spouse.

To obtain the judgment mortgage you need to go to the appropriate court and file various documents such as details of the name of the cause, the names and addresses of the parties, the trades or professions of the parties, the location of the lands, the amount of the debt and costs and a statement from the party who is owed the money which must be sworn.

Once the judgment mortgage is obtained then it can be registered in the Land Registry or the Registry of Deeds.

Once the judgment mortgage is registered the creditor can issue proceedings for the sale of the property and if he is successful in this application then the court makes an order for sale and this sale is supervised by the Examiner of the High Court.

For this part of your debt collection procedure you will generally need the help of a solicitor. But for anyone involved in small business it is no burden to carry to understand how the debt collection process works and your role in it.

Execution Order

The execution order occurs in the latter phase of debt collection. And this is after you have obtained a court order for the debt due to you.

In this scenario you apply to the relevant court for an execution order which, if granted, is sent to the Sheriff for execution. The sheriff then writes to the debtor and has a duty to execute the execution order within a reasonable time.

He has the power to seize all the debtors’ moveable goods and has a right of entry into premises but he must not use violence and must have reasonable grounds for believing that there are defaulter’s goods on the premises.
You will then be in a position to hand over that decree to the sheriff for the area and he must attempt to execute it on your behalf.

An execution order is valid for 12 months but often if the debtor has no goods to seize then the sheriff will return the execution order to the creditor marked ‘nulla bona’ which essentially means ‘no goods’.

However nowadays this procedure can be ineffective in practice as a lot of goods will be leased or supplied to the debtor with retention of title clauses in the contract or on a sale or return basis.

However the existence of bankruptcy proceedings, receivership or liquidation complicates things and the Official Assignee in bankruptcy, the receiver or liquidator all have priority. So whilst some debt collection procedures are relatively straightforward, some will need the assistance of a solicitor.

Attachment and Committal

This is a process where a debtor fails to abide by the terms of an instalment order (an order to pay a certain amount laid down by the court) then you can apply to the District court for an order of committal ie an order for arrest and imprisonment.

To apply for this order the you will need to lodge with the court the instalment order and a declaration of its service on the creditor.

However if the creditors failure is due to hardship or inability to pay the Judge will seldom grant a committal order.

Attachments of Debts(Garnishee)

Another feature of the debt collection procedure is a fairly uncommon procedure called a Garnishee.

This occurs where the creditor has no assets apart from debts due to him, then you can apply to have those debts paid to him instead. This can also occur in relation to balances in the creditors bank account, wages due to him and any other sums due to him.

Appointment of Receiver

Both the High court and the Circuit court have the power to appoint a receiver over a judgment debtor’s property to enforce a judgment. When the receiver takes possession it is held for the court who directs what shall be done with it. The receiver has the powers which are given to him by the court.

Bankruptcy

Another, and last resort procedure, in your debt collection may involve issuing bankruptcy proceedings.

If you are intending to issuing bankruptcy proceedings against a creditor you should bear in mind the following

You gain no priority in relation to your debt

Preferential claims will still be paid first ie employees, Revenue Commissioners etc.

Bankruptcy summons will only be granted by the High Court where all other avenues have been exhausted

The Bankruptcy Act 1988 provides 2 methods by which a debtor can make a formal arrangement with his creditors

A private arrangement under the control of the court which is very similar to an examinership process for companies.

This involves the debtor setting out the reasons why he is unable to pay his debts and requesting protection from proceedings including Bankruptcy.

When the protection order has been granted the debtor will meet with his creditors and make an offer to them.

If three fifths of the creditors in number and value accept the offer, it is deemed to be accepted

Private arrangement outside the court. This is a matter of contract between the debtor and his creditors and needs the support of all creditors.

Companies

Where you are owed money by a company and you know the company is insolvent then you can petition the High Court to wind up the company (section 213 procedure). This can be an effective debt collection procedure, although the courts do not like to see it used until all other debt collection avenues have been explored first.

To do this you serve a 21 day demand letter on the company; if the debt is not paid within this period the debtor is free to petition for the winding up. Again the petitioner’s debt ranks behind preferential creditors such as employees and the Revenue Commissioners.

Pursuing debt collection against a company

1. Obtain a judgement against the company by way of “summons for liquidated debt”, the amount of debt determines in what Court the summons is issued
2. Have the judgement executed by the sheriff or the county registrar
3. Have the judgement registered in the High Court which will result in publication in Stubb’s Gazette, potentially affecting debtor’s credit rating
4. Lodge an affidavit with the Property Registration Authority registering the judgement against the debtor’s property.
5. Obtain a Court Order that the company has wilfully defaulted on the payment of its debt.

The Courts have broad powers including the seizure of the company’s assets,the director’s personal assets and even the imprisonment of the debtor.This option can be expensive and difficult to prove, and the Courts may take the less stringent approach of for example a stay to allow the debtor pay.

Apply to the High Court, where the company is unable to pay its debts but is not in liquidation for a wide range of reliefs, including arrest, seizure of assets,imposition of personal liability and assessment for damages.

Apply to the High Court to have the company put into liquidation.

Conclusion

Debt collection procedures can range from the relatively straightforward to the more complex. You will find many useful resources though to assist you in your debt collection efforts.

And your local district court is a good starting point.If you don’t feel comfortable pursuing your own debt collection then you should check out debt collection solicitors who will pursue the matter on your behalf.

Filed Under: Debt Problems | Bankruptcy Tagged With: , , , , , , , , , , , , , , ,

The Small Claims Court in Ireland

The Small Claims court procedure in Ireland is an alternative method of commencing and dealing with a civil proceeding in respect of a small claim and is provided for under the District Court (Small Claims Procedure) Rules, 1997 & 1999.


The Small Claims court procedure is a service provided by District Court offices in Ireland and is designed to handle consumer claims cheaply without involving a solicitor.

To be eligible to use the small claims procedure, you, the “consumer” must have bought the goods or services (or the service) for private use from someone selling them in the course of business.

The small claims procedure is not available for use by one business person against another.

You should bring your small claim in the District Court area where:

the respondent lives or carries on business, OR
the contract was made, OR
in the case of damage to property, where the damage took place.

The District Court Clerk, called the Small Claims Registrar, processes small claims.

Where possible, the registrar will negotiate a settlement without the need for a court hearing. If the matter cannot be settled the registrar will bring your claim before the District Court.

Type of small claims dealt with

(a) a claim for goods or services bought for private use from someone selling them in the course of a business (consumer claims)

(b) a claim for minor damage to property (but excluding personal injuries)

(c) a claim for the non-return of a rent deposit for certain kinds of rented properties. For example, a holiday home or a room / flat in a premises where the owner also lives provided that a claim does not exceed €2,000.

Small claims in respect of other matters relating to rented accommodation must be brought to: Private Residential Tenancies Board,

Excluded from the small claims procedure are claims arising from:

(a) a hire-purchase agreement

(b) a breach of a leasing agreement

(c) debts

In making a small claim you must be sure of the name and address of the person or company against whom you want to make a claim. These details must be accurate in order to enable the Sheriff to execute the Court Order (Decree).

When a Respondent is a company, rather than an individual, it is important to ascertain the correct title of the company. This may be obtained from the Companies Registration Office www.cro.ie

How to Make a small claim

Contact the District Court Office in the area where:

the respondent lives or carries on business,
OR
the contract was made,
OR
in the case of damage to property, where the damage took place.

The Small Claims Registrar will provide you with the application form or you can download the Small Claims Application form from www.courts.ie

The fee for making a small claim is €15.

The completed application form together with the fee of €15 should be lodged with the Small Claims Registrar.

A copy of the completed application form will be sent by the Registrar to the person/party against whom you are making a claim, called the Respondent.

The original application form will be kept in the Registrar’s office.

If your small claim is disputed

If the Small Claims Registrar receives a notice from the Respondent disputing your claim or making a counterclaim against you, the Registrar will contact you and let you have a copy of the Respondent’s answer.

The Registrar may interview and negotiate with both parties to try to reach an agreement.

If your small claim is not disputed

If the Respondent admits your small claim he/she is required to notify the Registrar’s office by returning a Notice of Acceptance of Liability form. If the Respondent does not reply, the claim will be automatically treated as undisputed.

The District Court will then make an order in your favour (without you having to attend court) for the amount claimed, and direct that it be paid within a short specific period of time.

A counterclaim

A counterclaim is a claim made against you by the Respondent.

Failure to resolve a small claim

If the Small Claims Registrar is unable to bring about a settlement he/she will bring the case to the District Court for a hearing, if requested to do so and the Small Claims Registrar may call both parties to his/her office where a private and informal meeting will be held.

The Small Claims Registrar will probably ask you and the Respondent to outline the facts.

He/she may question both parties in an effort to clarify the issues.

If an agreement cannot be reached the Small Claims Registrar may there and then fix a date, time and location for a hearing of the claim before a judge of the District Court.

The date and time of the hearing and the address of the courthouse will be sent to both parties by post.

The District Court hearing

You must attend the District Court hearing.

On the court day remember to bring with you documentary evidence supporting your claim, e.g. letters, receipts, invoices.

The case will be heard in public as part of a normal sitting of the District Court.

Evidence must be given under oath or affirmation and the Respondent can question you on matters relating to your claim (called cross-examination).

The judge may require the Small Claims Registrar to assist the court at the hearing.

When your case is called the Court Registrar will call you to the witness box to give evidence.

The Respondent will also be given an opportunity to give evidence.

Each witness can be subject to cross examination by the opposing party or their legal representatives.

Engaging a solicitor for your small claim

You may engage a solicitor at your own cost but the whole reason for the small claims procedure is the minimization of the cost to you, the claimant.

Engaging a witness

You can bring a witness, but if expenses are incurred you will have to pay those yourself.

If you think it necessary, in your own interest, to have an expert’s report you will have to pay for this. Expert reports and witness expenses must be paid for by you.

Likewise, if the Respondent calls experts or witnesses he/she will be liable for their costs, if any.

If a witness does not agree to attend the small claims hearing

The Small Claims Registrar will, if you request and pay the small requisite fee, prepare and issue a witness summons on your behalf requiring a witness to attend the hearing.

The Small Claims Registrar will arrange service of the summons.

You will be obliged to pay for any financial loss incurred by the witness in attending court, if claimed

If the matter is decided in your favour

If the small claim is resolved in your favour, the Respondent will be notified of the court’s decision a few days after the hearing and will be allowed approximately 4 weeks to pay the amount awarded by the court.

Appealing the decision of the District Court

Both the Applicant and the Respondent have the right to appeal an order of the District Court to the Circuit Court.

Costs may be awarded by the Circuit Court but that is a matter for the individual Circuit Court judge to decide.

If the respondent does not pay

If the respondent does not pay, you can apply to the Small Claims Registrar to have the order of the court sent to you for execution by the sheriff.

There will be a fee payable to the sheriff, which will be refunded to you if the Sheriff succeeds in executing the court order (decree).

The execution of the court order is then a matter for the sheriff who will notify the claimant.

Information and assistance on enforcement procedures are available from the Small Claims Registrar.

For various reasons the Sheriff may not always be successful in the execution of Court Orders.

Conclusion

The small claims procedure can be a very useful procedure. But the small claim must be less than €2,000 and you can not use it to pursue business debts. You must have been acting as a consumer to bring a small claim.

The small claims court in Ireland is an effective method for resolving small claims without the need to employ a solicitor and the small claims procedure is pretty straightforward whilst the district court staff who deal with it are very helpful in the main and will answer your queries.

Filed Under: Debt Problems | Bankruptcy Tagged With: , , , , ,
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