|  | |  | | | | Debt Collection in the Republic of Ireland | | | Greater control of your debts prevents damage to your profitability and cash flow. Doyle & Company solicitors successfully act for commercial creditors by helping them recover their debts be they big or small. Through effective use of our case management system we use the most efficient debt collection techniques the Court system will allow. We endeavour to provide practical advice at the initial stages to ensure that good money is not being thrown after bad. We review the information you have on the person or company that owes you money ("debtor") and we carry out our own searches in the Companies Office, the Land Registry, the Registry of Deeds and the Judgments Office of the High Court before advising on the steps that should be taken.
Late Payments in Commercial Transactions Regulations 2002:
A recent development in this area of practice came with the European Communities(Late Payments in Commercial Transactions)Regulations 2002.The regulations were implemented to combat late payment in commercial transactions and provide that penalty interest will become payable if payments for commercial transactions are not made within 30 days, unless otherwise specified in a contract or agreement. At present the late payment interest rate is 11% per annum. The regulations apply to all commercial transactions both in the public and private sectors. They do not apply to contracts made before 7th August 2002, claims for interest for less than €5.00 or debts subject to other laws (eg insolvency proceedings).
If you run a business, we recommend that you review your payment practices and make sure that contracts are in writing as far as possible. It might be noted that if late payment interest is payable in respect of a payment, the supplier is also entitled to compensation for recovery of costs as outlined in the schedule to the regulations. You should inform your purchasers that interest and compensation for recovery of costs will be charged on late payments under the Regulations in much the same way as you would remind them that payment is due within a specified time limit. In general, it is recommended that you be 'up front' with the terms and conditions of your trade. | | | | THE DEBT COLLECTION PROCESS | | | The following is a short synopsis of the stages in the Debt Collection process:
1. Work done prior to issuing a Court Summons:
We first take instructions. We request an account of the dealings with the person/company that owes you the money (the debtor). You will have briefed us with all invoices and statements in that respect. We discuss the history of your dealings and your knowledge of the ability of the debtor to pay the debt. You will have made enquiries as to the debtor’s liquidity. We will assist with the searches as outlined above. An initial letter shall be written and the content of any response, telephone or correspondence, will be communicated to you.
2. A Court Summons will issue within l4 days of the initial letter, if there has been no response – this Summons is served by registered post.
3. Court Application for substituted service:
Frequently the person/company (debtor) who owes you money refuses mail or attempts to evade service. Our Debt Collection Solicitor will attend Court having first filed an Affidavit setting out the efforts at service and evidence of their knowledge that service is being evaded and the Court should grant an Order for Substituted Service.
4. Default Judgment:
If the debtor fails to file a document known as an “Appearance” to the Court Summons Judgment can be obtained through the Court Office on the filing of an Affidavit of Debt and other documents sworn by you.
5. Defended hearings:
Where the Debtor files an Appearance in the Court Office and files a document known as a “Defence” You will then be obliged to attend in Court with our Debt Collection Solicitor to prove the debt. If the Court accepts the evidence, Judgment shall be granted.
6. Interest:
Interest can be claimed at the rate specified in the contract, the subject matter of the proceedings. If there is no reference to interest in the contract the Judge has discretion to award interest.
Where a Judgment is awarded interest is automatically applied to the Judgment debt. The current statutory rate is 8%
E.U. Regulations provides that interest can be charged on all late payments after 30 days have elapsed at a rate of interest linked to the ECB base rate. The Regulations only apply to Contracts entered into after the 8th August 2002.
ENFORCEMENT OF JUDGMENTS:
There are a number of avenues available to you to have your Judgment enforced:
Judgments Office, The High Court:
Your Judgment will first be registered in the Judgments section of the High Court. This means that if Judgment Searches are done against the person/company who owes you money that Judgment will appear;
These Judgments are picked-up by all the trade gazettes such as Stubbs Gazette. These are weekly publications which are read by Bank Managers, Credit Controllers, Finance Houses etc. When a purchaser is buying a property, he/she must first do such a search and will insist on teh Judgement being satisfied before handing over the purchase money.
Judgment Mortgage in the Land Registry/ Registry of Deeds:
If the debtor owns property a note of the Judgment can be set out in an Affidavit sworn by you and this document lodged in the Land Registry or the Registry of Deeds. If that property is being sold the purchaser must do a Search. The debt will then have to be cleared from the proceeds of sale of the property.
In higher value claims it is possible for a Creditor to apply to the Court for an Order for Sale of the property so that the Debtor’s property will be sold and the debt, interest and costs discharged.
Lodging the Judgment with the Sheriff:
There is a Sheriff in each County in Ireland. Once he has a note of the Judgment he is entitled to seize goods in discharge of the debt. Simmilarly, purchasers when buying property do a search in the Sheriff's Office.
Garnishee Order:
If you the Creditor know that the Debtor is due monies from third parties a Garnishee Order can be obtained following the Judgment against those third parties. For example, if you are aware that the debtor has money in his Bank Account you can obtain and serve a Garnishee Order on the bank which orders the Debtor’s bank to pay the money directly to you.
Mareva Injunction:
This is an Injunction effectively freezing the Debtor’s assets.
A Mareva Injunction will be granted where you can prove that the Debtor may move his assets out of the jurisdiction or off-load them in such a way as to avoid discharging his liabilities to you or other Creditors.
Instalment Orders:
You are entitled to make Application to the District Court for an Instalment Order to compel the Debtor to pay the Judgment debt on an instalment basis if they prove inability to pay the entirity.
Committal procedure:
If an Enforcement Order is ignored you are entitled to have a Committal Summons issued requesting the Court to commit the individual to prison for non-payment
Liquidation:
If it is a company that is dishonouring the Judgment, Application can be made to wind-up the company under the provisions of the Companies Acts and an Order can be obtained to liquidate the company and realise the debt.
Bankruptcy:
Where the debtor is an individual and has sufficient funds - an application can be made to have the individual declared a Bankrupt
The Examiner’s Office:
This is an Office of the High Court. Application can be made to this office to have Directors of companies held liable for Company’s debts.
Orders for Sale:
In certain cases Application can be made to the Court to sell property, the subject matter of a Judgment Mortgage, in order to discharge the debt.
OTHER SERVICES
We can instruct investigators to initiate private investigations against the Debtor to provide for a financial profile. We can also seek to trace new addresses of individuals to establish current whereabouts. Companies Office Searches, both general and detailed, can be initiated as well as Searches in the various Registries registering title to individual/company’s property.
IRISH CIVIL COURTS FOR DEBT COLLECTING:
There are 3 Courts that deal with your debt depending on its amount.
District Court:
This Court deals with debts up to €6,348.00 There are District Courts throughout the country.
Circuit Court:
This deals with debts from €6,349.00 to €38,092.00. These Courts also cover each county in Ireland
High Court:
This Court deals with debts of €38,093.00 and upwards. That recovery work would be done through the High Court in Dublin only
The place where the debt was incurred or the registered office or home place of the debtor determines the court area where court proceedings must be initiated. See our contact with the courts service www.courts.ie
COSTS/charges to you and conditions on your retainer:
Every Financial Manager will want to ensure that he/she is in control of costs. We are obliged under S.68 of the Solicitors Amendment Act l994 to ensure that there is a clear understanding of the work involved and the basis of our fees and how they are charged. Fees and outlay consist of a combination of a basic fee and a commission on what is recovered as a result of our involvement.
| | | | Debt Amount: | Professional | Typical Outlay Fee | Initial letter threatening proceedings
of your instructions and the
issue to you of any direct
responses from the debtor to
the demand | €75.00
| | Costs of Proceedings to
Judgment –
District Court:
Debts up to €6,348.00 | | | | Issue & service Civil Summons | €250.00 | €22.00 | | Issue Affidavit to apply for Judgment | €100.00 | | | 0btaining default Judgment | €100.00 | | Circuit Court:
Debts from €6349.00 to €38,100.00 | | | | Issue and service Civil Bill | €350.00 | € 45.00 | Issuing Affidavit to apply for
default Judgment | €195.00 | | | 0btaining default Judgment | €195.00 | € 70.00 | High Court:
Debts €38,100 and upwards | | | | Issue and serve Summary Summons | €450.00 | €110.00 | Issue Affidavit to apply for
Default Judgment | €250.00 | | | 0btaining default Judgment | €250.00 | € 36.00 | Registration of Judgment:
Registration in the Register of
Judgments with consequent
publication in Dun & Bradstreet –
Stubbs and ITPA Gazettes | €125.00 | € 20.00
| | Registration of Judgment Mortgage | €475.00 | € 175.00 | | Registration of Satisfaction | €220.00 | € 20.00 | | Enforcement of Judgments | € 95.00 | € 15.24 |
| | | ADDITIONAL OUTLAYS:
In addition to the above you should note the following additional outlays:
Basic outlays are as set out above. There are additional outlays where say a debt was being recovered in another County and an Agent Solicitor would have to be appointed. From time to time, particularly in The High Court, a Barrister would be briefed. There are Search fees in the Land Registry, Registry of Deeds, Companies 0ffice, Investigators as well as travel and other miscellaneous outlays. You will be consulted in relation to 0utlays other than routine outlays.
COMMISSION:
Commission is charged on all sums recovered as a result of our action whether paid directly to you or through this office. The rate is l0% up to €6,000; 5% on the next €10,000 and 2.5% thereafter.
THIRD PARTY/ DEFENDANTS COSTS:
If you are not successful in your action costs can be payable to the defendant or third party.
ADMINISTRATIVE COSTS:
There are administrative expenses and these are charges for telephone, photocopying, faxes, couriers – this is charged at a rate of 3.5% of other fees. Exceptional items will be pointed out to you and charged separately.
Fee billing:
A bill for your costs and outlay will issue on the completion of each stage of the process as outlined. A bill must be settled within one month of leaving this office.
Special cases:
Cases involving individual attention and a higher level of expertise will be charged out at the relevant Solicitors normal charge-out rates. We will make every effort to ensure that all work carried out on your behalf is done in an efficient, fast and speedy manner.
FOR FURTHER INFORMATION – speak to:
FINNIAN G. DOYLE
PATRICK HEALY both at our Cabra Office
GERARD DALY at Blanchardstown Office
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