Initial notice in Ireland
Companies in Ireland
which must recover a debt
under a commercial contract
will issue a notice addressed to the party who must pay the respective sum of money.
The notice will need to contain the following information:
• details related to the provisions of the contract;
• details on the company that must recover the debt;
• the name and the address of the debtor;
• the notice should also include details on how the creditor will handle the debt collection procedure;
• the date in which the measures will become applicable.
The legal procedure in Ireland
If the parties involved can’t reach an agreement through an amicable procedure, the creditor can appeal to the legal procedure of debt recovery. Usually, the creditors will hire a law firm or a debt collection agency which can represent them in front of the court.
Before the commencement of the debt recovery
through the legal procedure, the creditors
can address to the liable part
and try to agree upon a payment scheme
for the due amount, paid in instalments. In the situation in which the debtor
refuses to pay the debt
and the creditor
is interested in recovering the amount due as soon as possible, he or she can start the legal procedure
by addressing to an Irish court
Debt collection in an Irish court
The court where the petition is filed is elected according to the value of the due amount: the District Court hears cases where the amount due does not exceed EUR 15,000; the Circuit Court will accept cases with a maximum value of EUR 75,000 and the High Court when the amount due is over EUR 75,000.
As a general rule, debt recovery cases are addressed to the District Court where the debt person filing for the trial is living. At the same, the Irish legislation also stipulates that such cases can be handled by the District Court where the contract was signed by the two parties.
The debtors have usually two options, after the creditor has issued a claim stating the reason for addressing to the court:
• the case can be annulled if the debtor pays the respective sum of money within 10 days since the notice was issued;
• the debtor can use the appearance and defence form to dispute the respective claim.
If there is no answer from the debtor within 7 days, the creditor will issue a Civil Bill to the court, designating the plaintiff’s and defendant’s names, the nature of the case, the value of the debt and other aspects, which can be drafted with the legal assistance of an Irish attorney.
A Notice of Intention to Defend can be elaborated by the debtor once the Civil Bill has been served. The debtor is allowed to a period of 21 days to contest the Civil Bill and if no answer is received, then an Affidavit of Debt is issued to the client. This is an official document signed by the creditor and returned to the court. After this step is completed, the enforcement procedure may be initiated.
The process of reaching a verdict may take 3 months for a standard case, out of which the pre-legal actions represent 2 weeks. Enforcement is often a very prolonged procedure and may take from 6 to 12 months.
The costs of a legal action may vary from case to case but usually some legal costs can be charged to the debtor. The judge usually takes this decision and approximately 60 – 70% of all costs are supported by the debtor after deciding that he or she must pay the debts which are subject to the process.
EU Late Payment Directive in Ireland
The late payment in commercial transactions
is regulated by the 2011/7/EU Late Payment Directive
enforced by the European Union in February 2011. The regulation was established in order to protect the European businesses
; at the same time, the law refers especially to the protection of small and medium enterprises
. The legislation became compulsory for the member states in 2013 and its main provisions refer to the following:
• as a general rule, public institutions are required to pay for a goods and services contract in a period of time of 30 days; however, it is also allowed to pay within 60 days, but only in certain circumstances;
should pay in a period of 60 days;
• the statutory interest is set out at minimum 8%, and it is applied when the payment passed its due date.
However, the legislation stipulates that each country may add other regulations which would be favourable to creditors
; our lawyers in Ireland
can provide you with more information about this directive.
Debt collection in Ireland is also regulated by the Consumer Credit Act 1995, as well as the European Communities Regulations 2010, in the case of natural persons who owe various sums of money for a purchase they have completed in Ireland.
For further information on the debt collection process in Ireland
, please contact our team of Irish lawyers
, who can provide legal representation on a debt recovery case