Thursday 25 May 2017

Unpaid debt soars as court judgments total €894m

Siobhan Creaton

THE surge in personal and business debt continued apace last year with new figures showing that the Revenue, banks, local authorities and energy and telecoms companies got judgments to collect almost €1bn last year from people who owe money in Ireland, a massive 149pc increase on 2009.

Figures compiled by Vision-net.ie show that court judgments valued at €894m were awarded against people and businesses that failed to pay their debts in 2010.

The Revenue has been the most pro-active in pursuing people through the courts to secure unpaid taxes and since 2008 has won judgments worth €178m. On average, Revenue debts amounted to €30,205 from individuals.

It is followed by the banks that have recovered more than €72m from customers over the same period, pursuing amounts of about €8,800 on average, due on loans that haven't been repaid.

Businesses that owe money have also been increasingly followed through the courts to force them to pay debts.

Since 2008, local authorities have won judgments totalling €6.7m in unpaid bills. Firms in the construction sector have taken this route to recover €4.6m in outstanding debts. Utility companies have turned to the courts to enforce the payment of €1.5m, while waste management companies secured judgments of €400,000, with telecoms companies owed €300,000.

Overall, the average judgment last year was €58,354 compared with €15,270 in 2009 and up from €8,817 in 2008. These include both registered and unregistered judgments.

Commenting on the figures, Vision-net.ie managing director, Christine Cullen, said the sharp rise in judgments shows that creditors and suppliers are taking tougher action to collect money owed.

"There is a shift in the increase in adverse actions, which signals a shift in the behaviour of creditors who are far less tolerant of people who are withholding payment," she said.

A breakdown of the judgments shows that the highest levels of both consumer and business debts were in the Dublin area. According to Vision-net.ie, judgments totalling more than €340m were recorded in Dublin, a 23pc increase.

Cork is the second highest with total judgments of €156m -- a 13pc rise, followed by Limerick with €71m. The smallest number of judgments was recorded in Longford, where they totalled €615,268.

Ms Cullen warned that as the Irish Courts Service has begun to prevent unregistered judgments being identified, this could create problems for businesses and consumers who may unwittingly incur bad debts because they are unaware that other creditors may be ahead of them.

"We have seen thousands of cases where judgments are awarded and a consumer or business still gets credit elsewhere and the cycle of non-payment continues," she said.

"The level of repeat defaults is staggering. This problem is now being compounded by not making it compulsory to register all judgments, meaning people will continue to trade in the dark."

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