Credit unions register 89 judgments

CREDIT unions are taking a more aggressive approach in pursuing those who are not paying their loans.

They are using the court route more frequently and, according to the Experian Gazette, there were 89 judgments registered by credit unions last month compared with just 43 in the same month last year.

The total amount of judgments registered jumped from €544,366 in July 2010 to €1,174,385 last month. The average judgment rose from €12,660 to €13,195.

Mitchelstown Credit Union was one of the most active credit unions last month and had judgments worth over €82,000 registered against people in Cork, Limerick and Tipp-erary.

It is believed that credit unions are coming to terms with pursuing bad or doubtful debts like other financial institutions.

A spokesperson for the Irish League of Credit Unions said each branch has its own credit control policy in relation to how they collect debts.

“Credit unions, as a last resort, will issue legal proceedings in the pursuance of a debt outstanding to the credit union. Every effort will be made by the credit union to contact the member to see if an agreement can be made in the repayment of an outstanding debt.

“However, the credit union has a duty of care to its members, whose savings fund the loans granted, to ensure that monies outstanding are paid back in full.”

The spokesperson said that if a member is experiencing any difficulties in the repaying their loan, they should contact their credit union “as soon as possible” so that discussions can begin about possibly changing their payment plan.

Recently, the Central Bank imposed lending restrictions on some credit unions due to concerns over rising levels of arrears.

Credit union regulator James O’Brien had warned that an increasing number of credit unions could be heading into financial difficulty.

The Government, however, has said that immediate steps are being taken to deal with weaknesses in troubled credit unions.

Overall, judgments of more than €185m were secured by creditors against debtors in the second quarter of this year.

The value of judgments obtained in the first six months of the year is €436m.