Wednesday 26 July 2017

Court data shows worst counties for debt rulings

Dearbhail McDonald Legal Editor

THEY are renowned for their financial thrift, but the residents of Co Cavan are among the most indebted people in the country.

A county-by-county breakdown of debt judgments obtained in Irish courts this year has revealed that Cork and Cavan are the most heavily indebted counties, followed by Limerick, Laois and Sligo.

The least number of court judgments per capita were collected in Mayo, Donegal and Clare, with residents of Kilkenny earning the title of the least indebted county, according to a debt map compiled by BusinessPro, the publishers of 'Stubbs Gazette'.

James Treacy, managing director of BusinessPro, said that 2010 was an "annus horribilis" for Irish debtors.

He warned that 2011 would be a bleak year as mammoth debts processed by the Commercial Court would be replaced by "a tidal wave" of consumer and mortgage debt that would materialise in the courts in 2011 and 2012.

"We estimate an additional €2bn of non commercial debt coming down the line next year," said Mr Treacy.

"Most of the consumer debt has yet to hit the courts, but with the end of the one-year moratorium for homeowners and other factors such as the proposed changes to our bankruptcy regime, we expect to see a huge surge in personal insolvencies connected with consumer debt.

"In the UK, there are 130,000 personal insolvencies every year with average debts of £200,000 (€234,000). Extrapolating those figures in an Irish context, we should be seeing at least 10,000 personal insolvencies a year here."

This year saw the largest ever number of individual and corporate judgments registered in the courts.

Judgments totalling €1.38bn were obtained from Cork natives, with one group of developers there racking up judgments of some €236m alone.

Cavan, with a population of just 56,416, attracted debt judgments in the courts of more than €127m.

Kilkenny, with a population of 80,421, had court debts of just €1.78m registered.

A Laois developer has topped the individual judgment league after a judgment of almost €90m was registered against him. A record €89.9m order was obtained against Thomas Keane from Corrigeen, Stradbally, Co Laois.

The largest corporate judgment was obtained against Donatex, the vehicle used by developer Bernard McNamara to invest in the Irish Glass Bottle Site in Ringsend, Dublin.

A judgment of more than €62m was also obtained against Mr McNamara personally, arising from the €412m purchase of the former toxic dump in 2006 by a consortium of investors.

Families and businesses are working hard to reduce their debts ahead of a major tax and income squeeze next year.

Income tax is set to rise and social welfare payments will be cut from January 1 as the Budget comes into effect.

Irish Independent

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