Debt collection / recovery specialists
When you decide to use Seamus Monaghan & Co, Solicitors we will discuss how best to tailor the action we take to your specific requirements. The services we offer include:
If the Customer is an Individual
If a Creditor successfully obtains Judgement against the Debtor from the District Court, Circuit Court or High Court (whether in a defended or undefended case) statutory interest, currently at the rate of 8% per annum, will be applied to the judgement amount. Costs can also be awarded but tend to be relatively minimal if the case is not defended. Once Judgement has been obtained, there are various options and enforcement methods which can be pursued.
The County Sheriff:
The County Sheriff is an officer of the Court who may seize goods from the Debtor in satisfaction of the debt owing. This is achieved by way of an Execution Order for Goods. These goods, once seized, will then be sold and the resulting funds will be used to discharge the debt. Often the Sheriff will return the Order marked “Nulla Bona”, which literally means “No Goods” but essentially means that the Sheriff could not find any suitable seizable assets belonging to the Debtor or could not gain entry to the premises.
Registration of Judgements:
One option open to a Creditor involves the registration of the Judgement. Various Trade Gazettes publish these judgements on a weekly basis and the threat of publicity is sometimes considerable encouragement for the Debtor to pay his debts, especially if the Debtor is actively trading. However, it is important to be cautious when adopting this option as it may result in an outcome beyond that which was intended. Registering a Judgement may have serious consequences for the Debtor. It may even result in the Debtor becoming insolvent and going out of business. If this occurs, recovering the debt may become an expensive and time consuming process with no guarantee of a successful action. It is also extremely important to note that if Judgement is registered mistakenly or after payment of the debt has been received, the Debtor is permitted to sue for defamation and may be entitled to claim damages. Furthermore, when judgement has been satisfied, it is important to remove it from the register.
Enforcement of Judgements:
There is no monetary jurisdictional limit on the District Court with regard to the enforcement of judgements. Therefore any judgements of the High Court, Circuit Court or District Court can be enforced using the enforcement procedures available in the District Court.
This enforcement procedure allows a Creditor to issue a “Summons for Attendance of Debtor”. Such a Summons orders a Debtor to attend before Court on a certain date to be examined as to their means. It is only appropriate for individual, rather than corporate, Debtors. The summons, duly stamped, is brought to the Court office in duplicate, together with a statutory declaration that the debt is due under a Judgement, Decree or Order of the Court and the Debtor is ordinarily resident in that court area. A Court date is inserted on the Summons and is returned for service on the Debtor. The summons should include a statement of means to be completed by the Debtor.
If the Debtor fails to attend for examination on the return date or fails to submit a statement of means or on examination fails to prove their inability to pay the Judge may make an Instalment Order. This might require the Debtor to pay the whole amount or a specified sum every week or month etc. If the Judge considers that to impose such an Order would be futile, he may adjourn the application generally. The application can be re-entered at any time if the Creditor learns of a change of circumstances in the Debtor’s financial situation. A Creditor may wish to have an Instalment Order varied in circumstances where they have learned that the Debtors financial circumstances have improved. This is done by way of an Order for Variation of an Instalment Order.
If the Debtor fails to pay the sums in accordance with the terms of the Instalment Order, the Creditor can apply for a Committal Order. This means that the Debtor can be arrested and sent to prison for a maximum period of 3 months. The Committal Order when granted must be lodged together with a warrant to enforce the order for arrest and imprisonment in the relevant Court office.
Garnishee Order and Receivership by way of Equitable Execution:
These types of enforcement may be effective where monies are owing to the Debtor by a third party or parties. These Orders would consist of the Court ordering that the monies owing by the third party or parties should be paid directly to the Creditor. Timing and knowledge of the Debtors Current financial affairs are essential for this type of enforcement and often it will not be a suitable type of enforcement. These Orders can be useful where the Creditor knows that the Debtor is selling his house or car, or where he is due to receive rent or some sort of payment in the future. The Court will however be very reluctant to attach such Orders to a Debtor’s salary.
If a Debtor owns a house, be it jointly with a spouse or otherwise, the Judgement can be registered as a Mortgage against the house. This would have the effect of prohibiting any dealings on that property until the relevant debt is discharged. The Creditor can also apply to have the property sold to obtain funds to discharge the debt. This is done by way of an application for an Order for Sale. Statutory Interest of 8% per annum, continues to be incurred while the Judgement Mortgage remains in place.
If a Debtor fails to pay a debt, then a Creditor can apply to Court to have the Debtor declared bankrupt. For obvious reasons, this option, when threatened, is a serious encouragement for the Debtor to pay the debt. This option is relatively expensive however, and can take a considerable time to complete. Furthermore, it should be noted that though a Creditor may initiate bankruptcy proceedings, commencing the bankruptcy proceedings does not automatically entitle the creditor to recover the debts owed to them. There will nearly always be preferential creditors such as the Revenue Commissioners who will be entitled to receive their monies first.
Winding Up by the Court:
The Court can order the winding up of a company on the petition of a person or body entitled to present such a petition. These petitions are usually made by or on behalf of the Creditors of the company. The threat of this action is also often a considerable inducement for the Debtor to pay the monies owed and can be very effective in many cases.
Restoration of a Company:
Where a company has been wound up, leaving debts owing to a Creditor, the debtor can apply to have the company restored to the Register of Companies, to facilitate the pursuit of the company and its directors to recover the debt owing. This is sometimes the only means by which a debt can be recovered from a company that is dissolved prior to paying off its debts. In such cases, the Revenue Commissioners may seek to recover any monies owing to them.
Our fees and charges are agreed with the client in advance of any action by us. Those fees and charges are tailored to suit our client’s needs. Our charges can include a commission element or, if the client prefers, our fees can include more of a fixed fee element. Where we charge a commission, we charge a fee of €25 for each letter before legal action. Often the receipt of a solicitor’s letter by a debtor will often be sufficient to bring matters to a satisfactory conclusion and court action can be avoided. The letter often prompts full or partial payment or a negotiation process in which we are often active participants usually by way of negotiation over the telephone based on instructions from our client.
We usually charge a commission on monies recovered. Our commission rate is usually 6.5% on the first €1,200 recovered and 4% on the balance. If the matter proceeds to the issue of court proceedings, in addition to our commission charges on monies recovered, there are also scale fees and which we will need to be paid by you.
The scale fees are set by the Government and are calculated by reference to the amount of the debt. These are recoverable from the Debtor if the case is successful. As the scale fee and the commission tends not to be an economic return for the work undertaken for issuing and serving court proceedings , we also charge you for certain costs of the firm which are not recoverable from the Debtor. Such costs reflect the time cost undertaken and also cover outlays such as postal charges. The scale fee and costs charges are in addition to the commission on monies recovered.
We set out below the general summary framework of our typical scale fees and cost figures below for each type and value of a court action on behalf of a creditor:
If we are obliged to attend in court or are required to proceed to a judgement in one of the above courts, then there will be additional costs in connection with preparing for the court hearing or the enforcement of the Judgement and any further action. There will also be additional charges incurred if it is necessary to engage a barrister in the Circuit Court or High Court proceedings.
It should also be noted that we are obliged to charge Vat at 21.5% on all our fees.
These figures are a basic guide to our estimated fees and should you wish to engage us in your debt recovery cases, we are obliged to provide you with what is known as a Section 68 letter. This letter will provide a more precise and definitive guide to the fees and costs likely to be incurred by you in relation to your particular case and will be based, as appropriate, on a detailed review with you of the circumstances of the monies owing to you.