Debt Collection

3 Critical Factors You Need to Consider in Collecting Debts


Are you owed money by a debtor?

And you’re not quite sure whether to just forget about it and write it off, or pursue it?

Before making your decision there are 3 critically important factors to consider.

  1. Who owes you the money?

This might seem like a blindingly obvious fact that you don’t need to be concerned about. Well, it’s not obvious at all.

Let me explain. While Mick or John or Susan may have ordered your goods or services they may have been acting on behalf of, and with the authority of another legal entity such as a partnership or limited company.

I won’t go into the legal concepts of implied or ostensible authority, and explicit authority, but keep at the forefront of your mind that you need to pursue the correct legal entity.

Because if Mick was acting on behalf of “Slim Shady Builders Limited” then there is no point in suing or pursuing Mick. The correct target is Slim Shady Builders Limited which may be on the verge of liquidation or dissolution.

  1. Are they a “mark”?

What I mean here is are they worth pursuing? If you are successful in obtaining a judgment against your debtor is there a possibility that you will get paid? Or a snowball’s chance in hell?

Remember: obtaining a judgment that is unenforceable is a complete waste of your time and money. Yes, you may have the legal costs of obtaining that judgment awarded against your debtor and in your favour but the bad news may well be that they still can’t pay.

  1. Will it be cost effective to sue?

If the amount of money owed is small it may not be worth your while pursuing it through the Courts. Your legal costs will still have to be paid and the scale costs which you may be awarded in the District Court will almost certainly fall short of your actual legal costs.

Guess who will be picking up the financial slack? You.


The best way to approach bad debts is probably try to avoid them in the first place by being more selective about who you do business with and your terms and conditions of engagement.

There is a saying in retailing that “volume is vanity”. What this means is that it does not make sense to pursue turnover at the cost of setting aside your good judgment and weighting up the prospects of getting paid for your goods or services.

Let’s face it: if you want to dominate any market just undercut everyone on price. But this isn’t a sensible strategy, I’m sure you’ll agree.

So, to avoid and reduce your bad debts sometimes you just have to walk away and refuse to supply unless you are paid in advance or load the dice in your favour to ensure a return for your business.

Debt Collection Transnational Litigation

How to Serve Legal Documents and Enforce Judgments Between EU Countries


Enforcement of judgments obtained in one EU country in another EU country is governed by the Brussels I regulation which superseded the Brussels Convention and the Lugano Convention.

Lugano convention

The Lugano Convention covers issues of jurisdiction where one of the countries is an EFTA (European Free Trade Association) country of which there are 3-Iceland, Switzerland and Norway.

Brussels I regulation

Brussels I regulation governs issues of jurisdiction and enforcement of judgments between countries who signed up to Brussels I. This therefore covers most EU countries.

The purpose of Brussels I was to provide uniformity as to the proper forum and jurisdiction in matters of transnational litigation.

The general rule arising from Brussels I is set out in Article 2 of the regulation which states simply that persons shall be sued in the member state in which they are domiciled.

For a business this would be where the company has it’s principal place of business.

However there are a number of exceptions to the above general rule.

Exceptions to general rule

In these exceptions to the general rule a Plaintiff may have a choice of jurisdiction in which to bring his legal proceedings.

  1. Contract- a person may be sued in the jurisdiction where the contract was to be performed.
  2. Insurance-there are special rules in relation to insurance contracts which are set out in section 3 of the regulation
  3. Tort-a person can be sued in the state where the harmful event occurred as well as his place of domicile
  4. Connected proceedings
  5. Consumer contracts-the Plaintiff can bring proceedings in his own state or in the state of the Defendant
  6. Some contracts of employment
  7. Property related proceedings-Article 22 stipulates that the proceedings be brought in the state in which the property is located.

Article 23 allows the parties to agree on which state will have jurisdiction-this is called Prorogation of Jurisdiction and this agreement should be in writing.

Service of legal proceedings under Brussels I regulation

Service of documents under Brussels I is governed in Ireland by Order 11A of the Rules of the Superior Courts and provides that legal proceedings may be issued without any need to obtain leave of the High court.

Service of documents under Lugano convention

When cases are governed by the Lugano convention the appropriate rules to follow are set out in 11B of the Rules of the Superior Courts.

Service of judicial and extrajudicial documents in member states of the EU in civil and commercial matters

SI 280 of 2009 sets out the rules and regulations in respect of service of judicial and extrajudicial documents in EU member states in Civil and Commercial cases.

Recognition and Enforcement of Judgments between EU States

The recognition and enforcement of judgments between EU member states is dealt with under the Brussels I regulation, specifically articles 30 to 56. In fact article 33 states that a judgment obtained in one EU member state will be recognised in other member states as a matter of course.

However this recognition will not be of much benefit to you if you are not able to enforce your Judgment in Ireland against the assets of an Irish debtor.

Order 42A of the Rules of the Superior Courts in Ireland sets out the procedure to have a foreign judgment enforced in Ireland and it involves an application to the Master of the High Court who is the designated authority.

To make such an application it will be necessary to swear a grounding affidavit which will exhibit the judgement which you wish to have enforced and proof that the judgment is enforceable in the state in which it was given.

This affidavit will also need to provide an address in Ireland for the service of documents on you as applicant.

If judgment was given in default of Appearance or Defence you will need to show proof of service of necessary documents on the defendant.

In addition you will need to produce an Annex V Certificate which is a certificate provided by court officials in the state in which judgment was granted and which sets out certain details concerning  the case and judgment.

Declaration of enforceability

Once the necessary documents above have been filed and exhibited the Master of the High Court will issue a Declaration of Enforceability which has the same effect as a Judgment of the High Court in Ireland.

A Notice of Enforcement is then served on the Defendant along with the order of the Master. The Master’s Order will contain a time period within which the debtor can appeal the decision, generally 1 month.

Defences to enforcement of EU judgments

Article 34 provides some defences to having a judgment from another EU state enforced in Ireland or any other state for that matter. These include:

  1. If recognition of the judgment would be contrary to public policy in the state in which application is made
  2. If the debtor was not served with documents and the judgment is in default of appearance or defence
  3. If it is irreconcilable with other judgments granted in the dispute between the parties.

Generally the most common problem is 2 above where the originating summons was not served on the defendant.
By Terry Gorry

Debt Collection

How to Collect a Debt-Debt Collection Procedures in Ireland

Do you have some outstanding debts that you could really put to good use in your business?

This piece will tell you how to collect a debt and give you a good overview of debt collection procedures in Ireland. (If you don’t want to do this yourself and need professional help to collect your debts contact me here).

The pressure on the cash flow of many businesses and sole traders, especially with the banks in Ireland effectively closed to many SMEs, can lead very quickly to a major cash flow problem.

The 1st question you need to ask yourself is: “is my creditor a “mark”?

In other words, is he/she worth pursuing? Once you have decided he/she is, then the procedure is pretty straightforward.

However your time may be better spent working on your business and handing over your difficult and worthwhile creditors to a solicitor.

Anyway, before you make any decisions, take a look at the procedures for debt collection in Ireland…

The monetary amounts for the jurisdiction of the District Court, Circuit Court, and High Court are set to change on 3rd February, 2014 as a result of the Courts and Civil Law (Miscellaneous Provisions) Act 2013.

When the commencement order for Part 3 of the Act is signed the amounts will change as follows:

District Court will have jurisdiction up to €15,000; Circuit Court will be increased to €75,000 (but €60,000 in personal injury cases), and High Court in excess of this amount.

Here are two 2015 articles about how to bring legal proceedings in the District Court and how to obtain judgment in default in debt claimsThe procedure in the District has changed slightly since I wrote those articles, with a Statement of Claim now required, not a Civil Summons, and the monetary jurisdiction increasing to €15,000.

Common questions in relation to debt collection in Ireland are set out below.

Questions which crop up most often include-

  • How do I pursue a debt?
  • Why can I not issue debtor proceedings for rent owed for my house?
  • Can I issue debt proceedings in the District Court myself?
  • What should I do when I receive debt collection letters?
  • What is the best way to deal with debt collection agencies?
  • Should I use a debt collection agency when trying to collect a debt?
  • What is a Judgment mortgages?
  • Where to bring enforcement proceedings for debt collection?

District Court proceedings (sums less than €15,000)

Where you are owed a sum of less than €15,000 and have exhausted your debt collection procedure of issuing demand letters and are clearly having no success the next step in the debt collection process is to issue and serve a Statement of Claim on your creditor claiming your debt.

If no intention to defend the claim notice is filed in the District Court then you are free to apply to the District court office, filing the correct documents, for a summary decree/judgment.

The documents you need to get judgment/summary decree are-

  1. An affidavit of debt sworn by yourself or by someone on your behalf (e.g. company accountant, company secretary)
  2. 2. A completed decree form.

If the District court is satisfied to enter judgment then you will get your signed decree from the District court and this can be sent to the Sheriff for enforcement.

A defendant can seek to have this decree set aside or varied on grounds of fraud, misrepresentation, surprise, mistake or other sufficient grounds.

Circuit Court proceedings (sums less than €75,000)

Again when no defence or appearance is received to your issuing of proceedings (Civil Bill) in your debt collection efforts you are free to lodge the necessary papers in the Circuit Court office to obtain judgment.

The papers to be lodged in the Circuit Court office are more extensive and you really need the help of a solicitor to do so.

But because the amount of debt that the circuit court will be dealing with will be up to €75,000, then it will be well worth it to get a legal professional on the case.

If the debt is defended and contested then it goes to court hearing and assuming you win an award you can obtain the court order from the County Registrar.

And just like the debt collection procedure for the district court, you can get the sheriff for the area to execute the court order.

High Court (sums greater than €75,000)

To carry out your debt collection for sums of this magnitude you must issue a High Court Summary Summons.

Assuming that no appearance has been entered by your creditor then you can proceed to lodge the necessary papers with the Central Office of the High Court judgments section which will allow you to obtain judgment in default of appearance.

This is a technical and demanding process which will require the assistance of a solicitor.

Once judgment has been obtained it should firstly be served on the defendant. Judgments of all courts can then be registered in the Central Office of the High Court and will appear in trade gazettes such as Stubb’s Gazette.

This prospect of adverse publicity can encourage a creditor to pay you promptly.

There are various procedures then for summoning before the appropriate court the debtor for the purposes of ascertaining what property and assets the debtor owns. This is a similar procedure which occurs in relation to bankruptcy.

If and when you obtain a court order or judgment against your creditor in your debt collection process another further step is to obtain a judgment mortgage on some valuable property of the creditor.

Enforcement of Judgments

There is no monetary jurisdiction on the District Court when it comes to the enforcement of judgments.

So, regardless of which court judgment is obtained, it can be enforced in the District Court.

However, before attempting to enforce judgment there are a number of essential steps to be taken:

  1. serve the judgment on the defendant. Personal service is required for an individual; for a company you can leave it at the registered office of the company or serve by post to that office.
  2. registration of the judgment in the Central Office of the High Court. This is not essential but the threat of appearing in Stubbs Gazette and other trade journals can be an encouragement to the debtor.
  3. examination of the debtor of the debtor as to means.

Enforcement of Judgment in the District Court

So, you have obtained a judgment against a debtor and now you wish to enforce it in the District Court or you have had a judgment given against you for a debt and you are confused as to what happens next.

It is important to understand that there is no limit on the jurisdiction of the District Court when it comes to enforcement of a Judgment so Judgment/Decree obtained in the District Court, Circuit Court or High Court can be enforced through the District Court procedures.

What happens next? How is the judgment enforced?

Serve the Defendant

A Judgment or Decree is simply a statement of the amount owing but it is no of itself an order to pay or an execution order.

So the first step after obtaining judgment is to serve it on the Defendant.

Register the Judgment

The Judgment can be registered in the Central Office of the High Court and published in trade gazettes such as Stubbs.

Sometimes the threat of publication of a judgment can encourage a debtor to attempt to come to some arrangement.

Examination of the Debtor as to Means

Examination of the debtor is a procedure where the Debtor can be summoned to the District or High Court to be examined as to his/her assets and property.

It is worth noting that the examination procedure cannot be carried out against companies, only natural persons.

For examination to take place a Sheriff will have to have returned “no goods” or “nulla bona” on the execution order or you as creditor will have to swear an affidavit that you believe the Debtor has no goods.

The solicitor for the creditor will issue a summons for the attendance of the debtor and if served by hand must be served at least 14 days before the Court date; if served by registered post it must be served 21 days before the hearing date.

The summons will have attached to it a Statement of Means which must be filled out by the debtor and lodged in the District Court office at least 1 week before hearing.

The solicitor for the creditor will need to lodge

1. The original Decree

2. An affidavit of residency confirming that the debtor lives where the summons has been served

3. A certificate of amount due.

Instalment Order

It is up to the Judge then to decide how much the debtor should be paying based on the statement of means and will make an order called an Instalment Order requiring the debtor to pay a fixed amount monthly or weekly.

However if the debtor has no means then an instalment order is very unlikely to be made.

Debtors’ Statements of Means are generally accepted by District Court Judges unless you as creditor can show that the Statement is inaccurate.

This instalment order must then be served on the debtor and will remain in force for 12 years from the date that Judgment was granted.

If the instalment order is not complied with the creditor can issue a Summons for Failure to Comply with An Instalment order.

This next appearance in Court by the Debtor may lead the Judge to granting a Committal order committing the debtor to prison.

However since the Caroline McCann/Monaghan Credit Union case it is much more difficult to commit a debtor to prison and the Court must be satisfied that the Debtor will not pay as opposed to being unable to pay.

After Instalment Order

If you are successful in obtaining an instalment order against the Debtor you have a number of options in attempting to enforce your judgment/decree.

Methods of Enforcement

The most common methods of enforcement of your judgment/decree include

  • judgment mortgage
  • execution order
  • attachment and commital
  • garnishee orders (attachment of debts)
  • appointing a receiver
  • order charging a partner’s interest
  • charging order over stocks and shares
  • sequestration

Getting a judgment against a debtor is one thing-enforcing it is quite another.

Once you have obtained your judgment against a debtor there are a number of avenues open to you to attempt to enforce that judgment including

  1. Judgment mortgage
  2. Execution orders
  3. Attachment and committal
  4. Garnishee order (attachment of debts)
  5. Appointment of  a receiver
  6. Charging order over shares
  7. Order for possession and delivery up
  8. Sequestration
  9. Charging a partner’s interest.

10. Bankruptcy

Judgment Mortgage

It is possible to register a judgment mortgage on property of the debtor, even the family home. You can then apply to the appropriate court to force the sale of the house and get paid out of the proceeds.

However the courts are reluctant to force the sale of the family home. It is important to realise that a judgment mortgage can be registered on a family home even without the consent of the non debt owing spouse.

To obtain the judgment mortgage you need to go to the appropriate court and file various documents such as details of the name of the cause, the names and addresses of the parties, the trades or professions of the parties, the location of the lands, the amount of the debt and costs and a statement from the party who is owed the money which must be sworn.

Once the judgment mortgage is obtained then it can be registered in the Land Registry or the Registry of Deeds.

Once the judgment mortgage is registered the creditor can issue proceedings for the sale of the property and if he is successful in this application then the court makes an order for sale and this sale is supervised by the Examiner of the High Court.

For this part of your debt collection procedure you will generally need the help of a solicitor. But for anyone involved in small business it is no burden to carry to understand how the debt collection process works and your role in it.

Execution orders

Execution orders, also known as “fieri facias” or “fi fa”, is the most common method of enforcement and utilizes sheriffs to attempt to seize goods of the debtor.

You will firstly need to obtain an execution order, either from the High Court or District Court and send it to the Sheriff for execution.

There are 2 independent Sheriffs in Dublin and Cork; in the other counties the County Registrar carries out the functions of a sheriff.

A sheriff has the powers of

  • seizure of moveable goods (but not goods on lease or hire purchase)
  • right of entry onto premises provided he does so peacefully and believes that there are goods on the premises.

An execution order from the District Court is valid for 6 years; from other Courts the period is 1 year.

If the sheriff is unable to seize goods he will return the execution order and mark it “no goods” or “nulla bona”.

Attachment and committal

It is possible to apply to the District Court to obtain an order for committal of the debtor to prison for failure to comply with an instalment order.

However this whole area has changed since the decision in the Caroline McCann v The Judge of the District Court and others with Monaghan Credit Union Limited case by Ms. Justice Laffoy where Flac challenged the constitutionality of imprisoning a debtor for failure to pay.

The finding of unconstitutionality of section 6 of the Enforcement of Courts Orders Act 1940 has led to a change in the law and basically a debtor is unlikely to be sent to prison now for inability to pay (as opposed to an unwillingness to pay).

Garnishee order (attachment of debts)

If a debtor has monies due and owing to him but has no goods it is possible for a creditor to obtain an order for attachment of debts to have repayment of the debt repaid to him instead of the debtor.

This type of order would cover

  • wages due to the debtor
  • a credit balance in the debtor’s bank account
  • other debts due to the debtor.

Appointment of a receiver

The Circuit or High Court has the power to appoint a receiver over the property of a debtor, selling it and paying the proceeds to the creditor. This method is entirely at the discretion of the Court as it is an equitable remedy.

Charging shares and stocks

This involves getting a charge on government securities or shares registered in the debtor’s name and ordering a transfer of those shares to the creditor.

Order for possession

This order applies where the creditor seeks to recover property other than money or land, for example goods and chattels. This too is an order at the discretion of the Court with no automatic right to the creditor.


This is an order against a person or company who has not complied with an injunction but can also be used to enforce a judgment.

Charging a partner’s interest

This comes about where the debtor is in a partnership and this gives the creditor priority over other creditors of the partnership.


Another, and last resort procedure, in your debt collection may involve issuing bankruptcy proceedings.

If you are intending to issuing bankruptcy proceedings against a creditor you should bear in mind the following

  • You gain no priority in relation to your debt
  • Preferential claims will still be paid first ie employees, Revenue Commissioners etc.
  • Bankruptcy summons will only be granted by the High Court where all other avenues have been exhausted

The Bankruptcy Act 1988 provides 2 methods by which a debtor can make a formal arrangement with his creditors

A private arrangement under the control of the court which is very similar to an examinership process for companies.

This involves the debtor setting out the reasons why he is unable to pay his debts and requesting protection from proceedings including Bankruptcy.

When the protection order has been granted the debtor will meet with his creditors and make an offer to them.

If three fifths of the creditors in number and value accept the offer, it is deemed to be accepted

Private arrangement outside the court. This is a matter of contract between the debtor and his creditors and needs the support of all creditors.

Execution Order

The execution order occurs in the latter phase of debt collection. And this is after you have obtained a court order for the debt due to you.

In this scenario you apply to the relevant court for an execution order which, if granted, is sent to the Sheriff for execution. The sheriff then writes to the debtor and has a duty to execute the execution order within a reasonable time.

He has the power to seize all the debtors’ moveable goods and has a right of entry into premises but he must not use violence and must have reasonable grounds for believing that there are defaulter’s goods on the premises.

You will then be in a position to hand over that decree to the sheriff for the area and he must attempt to execute it on your behalf.

An execution order is valid for 12 months but often if the debtor has no goods to seize then the sheriff will return the execution order to the creditor marked ‘nulla bona’ which essentially means ‘no goods’.

However nowadays this procedure can be ineffective in practice as a lot of goods will be leased or supplied to the debtor with retention of title clauses in the contract or on a sale or return basis.

However the existence of bankruptcy proceedings, receivership or liquidation complicates things and the Official Assignee in bankruptcy, the receiver or liquidator all have priority.

So whilst some debt collection procedures are relatively straightforward, some will need the assistance of a solicitor.


Where you are owed money by a company and you know the company is insolvent then you can petition the High Court to wind up the company (section 213 procedure). This can be an effective debt collection procedure, although the courts do not like to see it used until all other debt collection avenues have been explored first.

To do this you serve a 21 day demand letter on the company; if the debt is not paid within this period the debtor is free to petition for the winding up. Again the petitioner’s debt ranks behind preferential creditors such as employees and the Revenue Commissioners.

Pursuing debt collection against a company

  1. Obtain a judgement against the company by way of “summons for liquidated debt”, the amount of debt determines in what Court the summons is issued
  2. Have the judgement executed by the sheriff or the county registrar
  3. Have the judgement registered in the High Court which will result in publication in Stubb’s Gazette, potentially affecting debtor’s credit rating
  4. Lodge an affidavit with the Property Registration Authority registering the judgement against the debtor’s property.
  5. Obtain a Court Order that the company has wilfully defaulted on the payment of its debt.

The Courts have broad powers including the seizure of the company’s assets, the director’s personal assets and even the imprisonment of the debtor.

This option can be expensive and difficult to prove, and the Courts may take the less stringent approach of for example a stay to allow the debtor pay.

You can also apply to the High Court, where the company is unable to pay its debts but is not in liquidation, for a wide range of reliefs, including arrest, seizure of assets, imposition of personal liability and assessment for damages, and to have the company put into liquidation.

Need Professional Help With Debt Collection?

Sometimes, a solicitor’s letter will do the trick and have the desired outcome. If not, I can take stronger action on your behalf and commence legal proceedings.

Contact me here.
By Terry Gorry