Debt Collection Agency Ireland
Amicable Debt Collections Ireland
1. General information
Cosmopolite Collections’ collectors initially try to collect debts by a cycle of telephone calls and letters without recourse to legal action.
We always try to obtain payment of the debts in full, but if required, we will negotiate to agree on a payment plan or a settlement figure. In the event that we consider it necessary to escalate beyond amicable collections, we must support this process in Ireland by the issue of a Letter Before Action (LBA), which is the start of the legal proceedings.
This is not used in all cases, only those where our collectors consider that the debtor has the ability to pay and needs some strong evidence of our intentions. If there is no positive response to the Letter Before Action and we consider it cost-effective to do so, we will recommend that we issue proceedings in the local court.
This has to be done in Ireland by one of our legal partners, although Cosmopolite Collections will continue to be the point of contact for our client. It is necessary in Ireland for the solicitor to issue an Affidavit of Debt to be completed by the claimant and returned on headed paper. Once the proceedings are issued, the court will decide whether to uphold the claim, and in doing so, we are able to apply for a judgment against the debtor.
This judgment is published in the StubbsGazette to make the judgment public for those who wish to view it.
Once the judgment has been awarded, the case will pass to the enforcement officer to pursue. It is worth noting that the court process in Ireland, and particularly the enforcement, is not a speedy process and can be costly.
We will advise on a case-by-case basis about whether we consider it cost-effective to pursue this course of action.
Tracing debtors in Ireland can also present problems due to the lack of availability of census-type information. When there is a dispute, we aim to reach an amicable solution between the creditor and the debtor. We do this by analysing all contractual documents (e.g. signed contracts, orders, confirmations, invoices and delivery notes, as well as standard terms previously agreed upon).
1.2. Local agents
There is currently no availability for a field service to visit debtors in Ireland but we can organise on a case by case basis.
Late Payments in Commercial Transactions Regulations 2012 The purpose of these regulations is to give a legal effect to Directive 2011/7/EC of the European Parliament and of the Council of 16th February 2011 on combating late payment in commercial transactions.
That directive repeals, with effect from 16th March 2013, an earlier directive from 2000 (Directive 2000/35/EC) on combating late payment in commercial transactions in European Communities. Applicable interest rate The regulations, which apply equally to public and private sectors, provide an entitlement to interest if payment for commercial transactions is late.
The regulations provide that, unless otherwise specified in an agreed contract, the interest rate will be the European Central Bank (ECB)’s main refinancing rate (as at 1st January and 1st July in each year) plus 8%.
The ECB rates in force on 1st January and 1st July apply for the following six months in each year. Only one rate will apply to a late payment – that is the rate in force on the payment date.
The ECB rates can be checked on the Central Bank and Financial Services Authority of Ireland website at www.centralbank.ie.
The main provisions of the revised legislation are: Public authorities must pay for the goods and services that they procure within 30 days or, in very exceptional circumstances, within 60 days.
Enterprises should pay their invoices within 60 days, unless they expressly agree otherwise and if it is not grossly unfair to the creditor. Enterprises are automatically entitled, without the necessity of a reminder, to interest on late payments plus compensation costs.
The statutory interest rate for late payment is increased. Enterprises can challenge grossly unfair terms and practices.
1.4. Debt collection costs Ireland
As well as interest, the supplier may also charge an amount to compensate for the costs of collecting late payments.
The amount of compensation that can be claimed is determined by the outstanding amount as follows:
- Amount owed compensation EUR 1,000 to EUR 9,999 EUR 70
- Up to EUR 999 EUR 40 EUR 10,000 and over EUR 100
Statute of Limitations 1957 This outlines the time limit within which a creditor can chase a debtor for outstanding debts.
Creditors are given a fixed period of six years to chase their debtors, which is outlined in the Statute of Limitations 1957, and after this time, it is no longer possible to pursue their debts.
1.6. Accepted and most common payment methods
Ireland still operate on payment by cheque, although the preferred method is by bank transfer. If possible for longrunning payment plans, we will seek a standing order or direct debit, but there is natural resistance to this by debtors.
1.7. Types of companies
There are a number of company types, and each has its own particular requirements, which are listed below.
One of the primary reasons why legal actions fail is because clients do not know the trading styles of their debtors. An account opening form is highly recommended in order to support any legal action required at a future time. Sole trader This is a business run by one individual.
That person is personally liable for the business’ debts, but in order to issue legal proceedings, Cosmopolite Collections must first be sure of the identity of the individual and require information such as their name and, if possible, their date of birth.
Partnership This is a business run by at least two individuals who have joint and several liabilities.
Again, we need to be sure of the correct identities of the individuals in order to pursue them legally. In these businesses, each partner is responsible for debts and can be pursued for the totality. Limited company This is a company run by directorship. We can only pursue the company and not the individuals themselves.
1.8. Sources of information
Limited companies must register with the Official Register Companies House. Sole traders and partnerships are not required to do so.
Cosmopolite Collections are able to use several credit reference agencies in order to find out commercial details on limited companies. In the case of individuals, we are primarily reliant upon a trace agent to undertake personal online searches and qualify this information by means of calls to their neighbours and other businesses.
2. Retention of title
There are two types of retention of title: Simple Title of the goods only passes to the buyer in respect of payment for each invoice relating to those goods.
All monies Title of the goods only passes to the buyer when they have paid for all goods supplied. Cosmopolite Collections will advise clients to enforce their retention of title. In the case of all monies, the goods must be identifiable.
For this reason, it is not possible for Cosmopolite Collections to enforce ROT on behalf of our clients; however, we will assist in any way we can.
3. Safeguarding measures
Occasionally the debtor will offer a personal guarantee for the debt, but it is important to note that this must be legally enforceable.
4. Legal collections Ireland
4.1. General information
The process for litigation in the Republic of Ireland is very similar to that of the UK; however, it is sometimes more lengthy and costly to take action in Ireland. Whether the debt is insured or uninsured will affect the initial stages of legal action. If the debt is insured and all obligations under the policy have been followed, then in most cases, the credit insurance will contribute towards legal costs.
The client will still be consulted on the legal action; but if a claim has been paid, then the credit insurance will direct such action.
If the credit insurance does not cover the debt, then Cosmopolite Collections will require an agreement to legal action and costs in writing prior to the commencement of litigation.
We will also ask for payment on account for legal action, particularly if the case is defended.
4.2. Legal system
There are three levels of courts depending upon the value of the debt:
- District Court – up to EUR 15,000
- Circuit Court – up to EUR 75,000
- High Court – over EUR 75,000.
Should the debtor fail to respond to the seven-day letters, then the solicitor will issue a Civil Bill to the court for service on the debtor – this process can take up to six or eight weeks, depending on the location of the court in proximity to the solicitor and the volume of court cases. Once the Civil Bill has been served to the debtor, the debtor can return a Notice of Intention to Defend.
This means that the solicitor will seek details of the defence, and the case will be referred to the master for a hearing.
The exact route, like the UK court system, depends on the nature and severity of the defence. The debtor is allowed a period of 21 days to respond to the Bill, and, if there is no response, then an Affidavit of Debt is issued to the client.
Some new formats and requirements have been introduced with regards to the issuing of proceedings in the District Court. Cosmopolite Collections now need to issue a Claim Notice instead of a Civil Summons.
Affidavit of Debt This is a compulsory document in Ireland and must be signed by an official of the client who has sufficient awareness of the debt. At this time, it is also necessary to confirm the exact amount of the debt.
The sworn affidavit is returned to the court by the solicitor, and a return date is set by the court, which could be up to three months from the submission of the affidavit. The solicitor will then seek judgment, and the enforcement procedure will begin once this is issued.
4.3. Required documents
- The credit application form or signed contract
- An up-to-date statement of account showing how the
- balance due is computed
- Invoices or credit notes
- The proof of delivery dockets
- A guarantee
- Demand / call-up letters
- The full disclosure or copies of any correspondence between the parties prior to referral, pertaining to any possible contentious issues and/or disputes which may or have arisen.
If the court does not receive the above documentation, it cannot issue proceedings on our client’s behalf. This may in turn render the case statute barred and prevent future litigation.
4.4. Debt collection costs Ireland
These will differ greatly depending upon the type of legal action necessary. In any case, our experienced collectors will have a full discussion regarding costs and timescales before legal action is commenced.
Certain legal costs, such as some of the court costs, can be charged to the debtor. The decision to allocate costs lies with the judge, but in most cases, approximately 60%–70% of all costs are charged to the debtor’s account after successful judgment.
Cosmopolite Collections offer a highly competitive, fixed tariff for standard cases. Should the case become defended at any time, then the solicitor’s costs for dealing are charged at an hourly rate.
This depends entirely on the nature of the case and the seniority and experience of the legal advice needed.
Costs can range from EUR 150 to EUR 500 per hour.
It is not possible at the start of a case to make an exact estimation of costs, but it is clear to see that heavily defended costs can easily equal or exceed the value of the debt itself. For this reason, we will advise on some form of negation and/or mediation.
4.5. Expected time frame
On average, pre-legal actions, such as the LBA, take 14 days after issue. Litigation action takes approximately 12 weeks for a standard case to reach judgment. Sheriff coverage in Ireland is limited, and enforcement is often a very prolonged procedure, taking as long as six to 12 months.
4.6. Interest and costs in the legal phase
The solicitor will continue to add statutory interest and costs to the debt.
5.1. Enforcement in debt
A judgment does not necessarily lead to a successful collection.
The enforcement officer will visit the premises to try to collect the monies. The normal enforcement procedure is via collection by the sheriff, but the judgment itself is also published in Stubbs – a publication that is readily available to all and contains details of all judgments issued.
5.2. Enforcement in movable property
If the debtor is not able to make any payments, then the sheriff can seize property relating to the business as payment towards the debt through a notification of seizure, followed by the seizure itself.
The property is sold by the sheriff to realise funds; however, any costs involved in making the sale are deducted from the monies recovered.
5.3. Enforcement in immovable property
If the debtor owns immovable property, then Cosmopolite Collections can apply for a judgment mortgage.
This means that the property cannot be sold without first discharging the debt.
There can be several judgment mortgages against a single property, so it is advisable to check the likelihood of success before incurring additional costs.
6. Insolvency proceedings
6.1. General information
There are a variety of insolvency types within Ireland,ranging from a voluntary arrangement, offering a fixedpercentage pay-out to creditors; administration, where anadministrator is appointed to try to trade out the company;to liquidation, where all assets are liquidated.
The debtorcompany can move between these states, and we can bestadvise on a case-by-case basis.
If we establish that thedebtor has become insolvent, we are able to register thedebt with the insolvency practitioner. If it is judged thatthere will be dividends at some point in the future, we canmonitor the debtor to claim the dividends when appropriate.
However, there is a procedure that operates only in Irelandcalled an Examinership. It runs for a period of 100 daysunder the protection of the court.
An insolvency practitioneror liquidator is appointed to review the failing businessand make proposals for consideration by the creditors. Anyproposals agreed by the creditors must then be ratified bythe court, and the court issues a report agreeing on the sameand detailing the amount of any dividend payable.
6.2. Required documents
- Copies of invoices
- Copies of orders, order confirmations and delivery notes
- Copies of general conditions of sale, should there be any.
6.3. Expected time frame and outcome
Claims usually need to be lodged in a formal insolvency within six months. An insolvency practitioner will write directly to the client in the first instance. Insolvencies can last up to five years