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Friday 25 July 2014

Rise in borrowers taken to court for credit union debt

Charlie Weston Personal Finance Editor

Published 04/04/2012|05:00

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CREDIT unions are taking a more aggressive approach to those who owe them money, with a surge in the number of people being taken to court over debts.

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The 407 credit unions in the State are increasingly turning to the courts to obtain judgments -- an order of a district or circuit court that a person must pay what they owe.

Figures obtained by the Irish Independent show that, last year, 3,670 people were dragged through the courts by credit unions, according to calculations by 'Stubbs Gazette'.

This represents around one in eight of the 30,000 judgments obtained by all lenders in the district courts and is double the number for 2009.

The figures for the number of judgments are estimates because the Courts Service is now refusing access to its data.

Credit unions are also eager to register judgments. This means the details of the court decision will be published and will appear on the consumer's credit record.

James Treacy of Stubbs Credit Bureau said credit unions were increasingly turning to the courts to recoup unpaid loans.

A spokeswoman for the Irish League of Credit Unions defended the court actions. Legal moves were only taken where a credit union member refused to discuss their debts or agree to a rescheduling of repayments.

Difficulties

"Unfortunately, on some occasions, it is only when legal intervention is made that a member will engage with the credit union on an arrangement around the debt and, while we regret that this is on the increase, it is a sad reflection of the economic difficulties that many of our members are facing."

She added that credit unions would make every effort to engage with members in difficulty.

The average loan was €8,300 and, once repayments were rescheduled, credit unions tended to be successful in recouping the debts, she added.

'Stubbs Gazette' has had to estimate the number of judgments being granted to credit unions. This is because, since October 2010, the Court Services has refused permission to correspondents to collect unregistered judgments.

Unregistered judgments account for more than 80pc of total judgments.

The grounds given were that it was not specifically written into statute that information on unregistered judgments could be collected, even though 'Stubbs' had been collecting these since 2000.

Legal action is to be taken by a company called Registry Trust/Irish Judgments, which engages correspondents to collect judgment information from courts, over the move to curtail access to judgment information.

Irish Independent

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