Calls for help on debts

Fresh calls have been made for a solution to the consumer debt problem, with new figures showing a 56% year-on-year increase in money awarded to the banks in bad debt court judgments in the first quarter.

Christine Cullen

According to business and credit risk analyst Vision-net.ie, Irish banks were awarded €52.4m in 86 separate bad debt judgments against consumers during the first three months of this year.

That figure is up by 56% on the same period last year and contrasts with a 22.5% annualised drop — for the same timeframe — in the level of commercial judgments in favour of the banks.

Another €24.4m — up almost 41% year-on-year — can be factored in when judgments against consumers resulted in awards to Revenue and credit unions.

“Debt forgiveness and the issue of ‘moral hazard’ are predicaments that both Government and the banks are continuing to struggle with,” said Christine Cullen, the managing director of Vision-net.

“However, the continuing high level of debt — particularly consumer — which these latest judgment figures reveal, suggests the need for a coherent and feasible policy approach to the problem.”

Ms Cullen noted that an expansion of the remit of the Insolvency Service of Ireland could help address the continuing overhang of consumer and commercial debt. She said the data suggests the banks are accelerating efforts to clean up their balance sheets by tackling legacy debts.

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