More humane approach to debt being seen, says judge

Economic recovery and a more humane approach to financial debt is being seen in the courts, after six years of recession and personal financial trauma.

The country’s top judge Susan Denham said the emerging trend “may offer a level of hope” for people struggling with debt, an issue which has dominated the courts.

Publishing the Courts Service Annual Report 2014, the Chief Justice said the number of debt cases at every level of the courts had decreased “dramatically” on the previous year.

The report shows that summary judgments for debt dropped by:

• 27% in the High Court, from 2,675 in 2013 to 1,958 in 2014.
• 43% in the Circuit Court, from 9,103 to 5,146.
• 41% in the District Court, from 13,142 to 7,771.

Many of these cases are taken by financial institutions trying to recover specific amounts of money, often in respect of loans.

The report shows a 9% decrease in the number of companies declared insolvent.

There was a marked jump in the number of cases of personal insolvency, or bankruptcy. There were 448 cases in 2014 – but 432 of those were sought, not by the creditors owed money, but by the people in debt. This was an almost six-fold hike on 2013.

“This increase in those in debt seeking bankruptcy, is a dramatic turn of events: one which indicates that people see bankruptcy as providing some protection, as may not have been the case in previous generations,” said the Chief Justice.

The time period for bankruptcy had fallen dramatically, from 12 to three years.

Ms Justice Denham said there was “no doubt that the boom and bust of recent years had a major impact on the courts”.

She said nowhere was the effect felt more than in the area of personal debt.

“2014’s report may offer a level of hope in the area of personal debt,” she said. “Court figures are beginning to show that we have gone from boom to bust in years past – but that recovery, and a more realistic approach to personal debt, is being reflected in cases coming to court.”

The report records a rise in property possessions last year with a doubling of possession orders in the Circuit Court.

A new initiative is now in place in six locations (Dublin, Cavan, Trim, Wexford, Mayo and Roscommon), where the Money Advice and Budgeting Service and the Citizen Information Bureau are providing independent information on possession matters at courthouses.

It will be rolled out to courthouses nationwide in September and October.