Debt judgements against consumers rise but judgements against businesses fall

A new analysis of the value and volume of judgments at the High Court has shown that there was a huge leap in cases against consumers.

Debt judgements against consumers rise but judgements against businesses fall

Debt purchasers were responsible for almost €70m of claims against consumers in the High Court in the last 18 months.

A new analysis of the value and volume of judgments at the High Court has shown that there was a huge leap in cases against consumers, while judgments against businesses have fallen for the eighth year in a row.

The analysis was carried out by Irish Judgments, part of non-profit judgment registrar Registry Trust. It was based on cases registered at the request and cost of creditors at the Four Courts in Dublin and, as such, only provides a partial picture of unmanaged debt judgments in the country.

It shows that 69% of all claims were from seven major claimant categories. In terms of volume, the public sector was by far the most significant. Revenue's Collector General was responsible for 1,970 of the claims. Local authorities were responsible for the second-highest, with 320.

Banks led private sector claimants with 247 claims, followed by credit unions on 102 and debt purchase companies on 51. There were 60 utility claims from the energy sector and eight claims from insurance companies.

In contrast, when analysed by the value of the claim, banks were responsible for nearly half of all claims, at €112m.

Debt purchasers were next, accounting for €68.3m. The collector general was responsible for €54.5m, with local authorities (€2.7m), insurance (€1.1m), credit unions (€900,000) and energy (€450,000).

Debt purchasers are a relatively new arrival among claimants. Most are private equity-backed funds who have bought distressed mortgages. The most active of these was Launceston Property Finance Designated Activity Company, who had 21 judgments in their favour, worth €38.9m.

What is a debt purchaser?

Debt purchasers, some known as vulture funds, are relatively new arrivals among claimants in Ireland. These are mainly private equity-backed funds which buy distressed or non-performing mortgages and loans from the main banks and mortgage companies at a reduced price.

They collect on the debt either on its own, through the hiring of a collection agency or, in some cases, by pursuing the debt to courts.

While debt buyers typically buy larger debts like mortgages, more and more buyers in the Irish market are also now pursuing smaller claims, like credit card debt and utility bills, according to Registry Trust.

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