Huge rise in debt-strapped consumers taken to court

CONSUMERS are increasingly being hauled before the courts for failing to pay their debts as banks, the taxman and firms get tough during the economic slowdown.

Stubbs Gazette, which publishes a weekly magazine listing debtors before the courts, said it has seen a rise of 30% to 40% in debt cases in a year.

The largest amount of cases are being brought against individuals who default on consumer debt like credit cards, mobile phone bills, and credit union loans.

In just one week last month, the Revenue Commissioners secured judgments against 21 debtors, allowing the taxman to recoup €500,000 in unpaid tax.

“We would say it’s evidence of a slowdown as more and more people are not paying their debts,” said Paul Johnston, sales manager of Stubbs Gazette.

Cases can take a year to go through the courts, so the rise in listings in an indication of the numbers of people who have been in financial difficulty.

Today, Stubbs publishes between 1,500 and 2,000 judgments against debtors every month, compared with 1,000 to 1,500 a month in 2007.

Companies who are owed money can secure a judgment against their debtors so they get powers like being able to send in the bailiff to force the person to pay up.

People who are owed money can pay the courts an extra fee to “register” such a judgment against the debtor.

By doing so, the facts of a debtor’s failure to pay are made available to other lenders.

Unregistered judgments lie in the files of the court where the case was heard and though publicly available are less well known. These are commonly used by credit unions.

Mr Johnston said rising mortgage costs and the availability of cheap credit has also fuelled the rise in court cases.