Consumer bad debt judgments hit €500m as credit defaults double


By Charlie Weston

Irish Independent

Thursday December 10, 2009

OVER-borrowed consumers have had almost half a billion Euro in bad debt judgments registered against them in the courts this year, new figures show.

This is a 50pc increase in the number of consumers who defaulted last year on debts owed to banks, credit unions, the taxman and phone companies.

The average value of these 'credit defaults' has almost doubled to €22,000 per consumer, data prepared for the Irish Independent shows.

More than 22,200 consumers have had bad debt judgments lodged against them in the district, circuit and high courts in the first 11 months of 2009, statistics compiled by debt monitoring company BusinessPro show. This is a rise of 49pc on the same period last year, when there were almost 15,000 credit defaults in the courts.

Overall, the value of the credit defaults amounts to €482m, up dramatically from €172m in the same 11-month period last year. This is a rise of 180pc.

The figures don't include the €21.9m in judgments registered against builders and contractors so far this year, or the €1.5m registered against those who gave 'property developer' as their occupation.

Stark

BusinessPro boss James Treacy said the figures shine a stark light on the extent of over-indebtedness in the State.

Mr Treacy, whose firm publishes debt monitor 'Stubbs Gazette' said many consumers were trapped in a vicious circle of debt.

"People are just snowed under with debts. It is not unusual to come across a person with a small business who has 15 or 16 creditors -- like the Revenue, suppliers and banks -- knocking on his or her door looking for payment. But often they can't get their own debtors, who owe them money, to pay up so they are trapped in a vicious circle of debt."

The figures show that the largest number of court cases taken to recover personal debts have been by credit unions this year. Some 3,444 cases were taken by credit unions, with the average amount coming in at €13,573. Bank of Ireland initiated 1,925 cases, with an average amount of a much higher €33,117.

Also using the courts to recover debts is the taxman. The Revenue Commissioners took 1,538 cases in the 11 months of this year, with an average amount of €46,000, the BusinessPro figures show.

AIB took 984 people to court to recover debts, with an average amount of €23,990 featuring in the bank's legal actions.

Eircom and Hutchison 3G Ireland also figure in the companies pursuing consumers through the courts for unpaid debts.

The Law Reform Commission (LRC) has advocated a radical reform of the legal debt recovery process in this country.

A recent consultation paper from the LRC recommended that the law recognise the distinction between debtors who cannot pay and those who refuse to pay, and that those who cannot pay have a range of options open to them to help them deal with their debts.

It also recommended a new system of debt enforcement, based on the introduction of a central debt enforcement office and the removal of most debt enforcement proceedings from the courts.

Top Judgments Registered

11.11.2020

Urban Green Private Limited
Address: R/o Atkins Hall, River Towers, Lee Road, Cork
Amount: €734,547.90

10.11.2020

Thomas O'Brien
Address: Castlegrace, Clogheen, County Tipperary
Amount: €93,749.13

10.11.2020

Margaret O'Brien
Address: Castlegrace, Clogheen, County Tipperary
Amount: €87,979.01

06.11.2020

Sean Browne
Address: 24 Woodlands Avenue, Arklow, Co Wicklow
Amount: €38,094.60

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