No business, whether large or small, needs the unnecessary strain that recovering commercial debt can place on its resources. Unfortunately, the need to recover commercial debt can happen at any point in time and for a variety of reasons: customers or clients failing to observe their monthly payment obligations; or violations of the terms of a commercial agreement.
Your organisation should be confident that they can hand these affairs to experienced advisors who can deal with them effectively, preventing important resources from being diverted away from your business.
Recovering Commercial Debt in Ireland
The team at Sherwin O’Riordan have a long tradition of supporting businesses to succeed. We understand the inconvenience and problems that can arise when there is debt owed to our clients and take our role as commercial lawyers very seriously, providing an efficient and effective service to our clients.
You should be aware that there is a certain process for recovering commercial debt. It is wise to follow this process carefully, to ensure that there will be no obstacle to your recovering monies that your organisation is due.
Make the debtor aware of the situation
When you have not been paid by a customer or client, it is important that you bring this to their attention at the earliest opportunity. In most cases, this will involve sending a letter to them, pointing out two things:
- That a sum of money is due to be paid by an individual to your organisation; and
- That the payment in question is outstanding.
It is also advisable to make it clear to individuals that have not discharged their financial obligations that interest may be applied under European regulations. The rate which may be applied is the European Central Bank main referencing rate, plus 7%. You may also point out that they may also become responsible for any administrative costs that your organisation incurs in attempting to recover the outstanding debt. You must also make it clear that their failure to make payment of the debt within a reasonable time may result in legal action being taken against them.
Taken together the detail contained in a letter to a debtor will constitute a ‘Letter Before Action’. It is important to give a debtor some margin to discharge their obligations to your organisation, otherwise a court may question your handling of the matter.
At Sherwin O’Riordan, we often carry out the drafting of a ‘Letter Before Action’ for clients. We ensure that debtors are made very clear of their obligations towards you, and in many cases this will be sufficient to generate payment of debt. However, we also understand that this may not always be the case, and point out to debtors that their debts may become the subject of court proceedings if payment is not forthcoming.
Bring the matter to the court’s attention
If a debtor has not responded to your ‘Letter Before Action’, the next step will be to bring the debt before the courts. The amount of assistance that the courts will be able to provide will depend on you particular circumstances:
In the first instance you must bring your outstanding debt before the correct court. Depending on the value of the debt owed to you, one or another court will be the correct forum for it to be dealt with:
- The District Court handles all claims concerning debts of €15,000 or less;
- The Circuit Court will deal with all claims concerning debts between €15,000 and €75,000; and
- The High Court will consider all claims concerning debts of more than €75,000.
In bringing the matter before the court, you may ask for it to issue its judgment against your debtor. This is otherwise known as a judgment order, and will normally be issued where your debtor fails to engage in the court process and defend against your claim for the outstanding debt to be satisfied.
At Sherwin O’Riordan, we are very experienced in navigating the processes in each of the different courts. All paperwork will be cross-checked by senior members of the team, to ensure that the outstanding debt is properly recorded and that the debtor will receive fair notice.
The next step in the court process where a debtor has not responded to your calls for their debt to be satisfied, resulting in the court issuing its judgment in your favour, is to take steps to enforce the judgment. These include:
Registration of the judgment – This involves your registering the judgment in the Central Office of the High Court. Registration of a court judgment does not enforce a judgment per se, however, it does publicise the fact that a judgment has been issued against your debtor, and will impact on their ability to borrow in the future.
Instruction of Sheriffs or Country Registrars – This allows you to instruct either Sheriffs (in Cork and Dublin), or County Registrars (everywhere else in Ireland) to attend at the debtors premises and seize goods that they own and sell them in order to recoup the outstanding debt.
Attachment of a debt order – This order, if granted by the court, allows for a debt that is owed to your debtor to be paid to your organisation instead of the debtor. This can be useful where it is clear that the debtor has limited financial capability themselves to discharge the debt.
Judgment mortgage – You may be particularly concerned over the repayment of debt, and can ask the court to grant you permission to register the debt as a judgment mortgage over the debtor’s property. This preserves the value of the property, and can be used to satisfy the outstanding debt.
Contact our Debt Recovery Solicitors in Dublin
At Sherwin O’Riordan, we understand that the prospect of having to pursue debtors for unsatisfied debts can be costly and time-consuming for our clients. This is why we aim to take the responsibility for doing so away from them, allowing them to concentrate on more important matters, and to be confident that their debts will be handled by an experienced team of legal advisors. We have acted for a number of leading organisations including Ulster Bank, IBRC and ACC Bank. If you are concerned about the payment of outstanding debts owed to your business, or are in need of advice on how to secure this, contact our team today.
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