Court proceedings for recovering debts

If you owe money to someone, you are their debtor. The person (or group of people or company) you owe money to is your creditor. They are entitled to ask you to pay your debts but they are not entitled to harass or intimidate you to pay.

If you fail to pay a debt, your creditor is likely to go to court to get a judgment that you owe the debt.

If the creditor gets a judgment against you, they can use different ways to get the money from you. This is called enforcing a judgment.

If a judgment order is made against you, you usually have to pay your creditor’s costs in taking the case. These costs are added to the amount of the judgment and can be enforced against you as part of the enforcement of the judgment.

Legal aid

Most court proceedings about debt are under civil law, rather than criminal law. You may be eligible for civil legal aid if you pass the means test and if your case is likely to succeed. If you accept that you owe the debt and that you have no defence to the claim, then your case is unlikely to succeed and you would not get civil legal aid.

If you do not pay an instalment order, you may have to go to court for committal proceedings to decide if you should be sent to prison. You can apply for criminal legal aid and the judge will decide whether you get it.

The proceedings are started by the person to whom you owe money. That person (or group of people or company) is the creditor and the claimant or plaintiff in the case. You are the debtor and the respondent or defendant in the case.

The procedures and the documents which are used are different depending on which court is involved and sometimes depending on which kind of debt is involved.

In general, you are given documents that set out the details of what you owe. You can choose to defend the action. This means that you must provide a document in reply. This can argue that you do not owe the money, or that the contract is not valid, or some other legal defence. If you do not do anything, then the judgment will probably be awarded against you.

In general, if you are served with a document starting legal proceedings, you have 3 options:

• You usually have a number of days in which to pay the debt, in which case the proceedings do not start. In legal language, the proceedings are stayed.
• If you cannot pay what is owed and you have no defence, you can agree to an order being made.
• If you intend to defend the action, you must serve the necessary replying documents. Then a date is usually set for a court hearing to decide what happens.

Initial notice

If the matter at issue is covered by consumer credit legislation, then the person you owe the money to (the creditor) must issue a notice to you at least 10 days before they take legal action. This notice must include:

• Details of the agreement
• The name and address of the creditor or owner
• Your name and address
• The term of the agreement to be enforced and
• A statement of the action the creditor intends to take to enforce the agreement, including how and when they intend to take this action

If the consumer credit legislation does not apply, then it is the usual practice for creditors to send a 7-day demand letter to you before starting legal proceedings. This, however, is not always a legal requirement.

Which court deals with the case depends on how much you owe. If you owe:

• Less than €15,000, the court proceedings should be brought in the District Court
• Between €15,000 and €75,000, the court proceedings should be brought in the Circuit Court
• If you owe more than €75,000, the court proceedings should be brought in the High Court

In general, the legal proceedings must be started in the District Court area where you live or where the contract was made.

District Court proceedings are started when the creditor issues a claim notice to you. This notice states the creditor’s claim – for example, that you owe them €5,000 for goods bought on a specific date. Read more about the process of issuing a claim notice.

The notice gives you 2 options. You can:

• Pay the amount claimed within 10 days and avoid a court appearance or
• Dispute the claim by providing the claimant with a completed appearance and defence form within 28 days
• The claim notice must be served on you. The creditor must provide proof that the notice of claim form was served within the legal time limit. This can be done either by:
• Oral evidence to the court or
• A statutory declaration of service, which must be lodged with the District Court Clerk at least 4 days before the court hearing.

If you do not respond that you intend to defend the proceedings, there is no hearing and the creditor gets a judgment that you owe the money. In this case, the creditor files the following documents with the District Court Clerk:

• An affidavit or statutory declaration of service of the claim notice. An affidavit is a written statement that is sworn to be true by the person signing it.
• A certificate of no appearance or defence.
• An affidavit of debt verifying the creditor’s claim.
• A District Court decree.

These are then checked and, if all documents are in order, the judge of the District Court issues the judgment. The judgment is for the amount owed plus the costs involved in the proceedings.

Having got the judgment, the creditor is then entitled to enforce the judgment. Interest on the amount of the judgment (but not the costs) is charged from the day the judgment is given.

If you defend the proceedings

If you have sent your appearance and defence form, the creditor must serve a notice of trial on you at least 10 days before the court hearing.

At the hearing, the judge hears the arguments from the creditor and from you and makes a decision. It could be a judgment in favour of the creditor or to dismiss the action.

If the judge considers that you cannot pay the amount through no fault of yours, the judge may elect to pause the enforcement of the court order for a period of time – this is known as a stay of execution. Alternatively, the judge may make an order for payment by instalments.

If you do not defend the proceedings, there is no hearing so it is highly unlikely that a stay of execution or order of payment by instalments will be granted.

The procedure in the Circuit Court is similar to that in the District Court but there are some differences in the documents used.

The proceedings start with the creditor serving an ordinary civil bill on you. This is similar to the claim notice used in the District Court. The claim being made by the creditor is set out in the indorsement of claim. This must set out the details such as the date and the content of the contract.

The civil bill states that, if you want to defend the case, you must enter an appearance within 10 days. This period can be extended by agreement or by direction of the court. Entering an appearance means that you must lodge a specified form with the County Registrar and give a copy to the creditor or his solicitor. The County Registrar organises the business of the Circuit Court and has a similar role to that of the Clerk of the District Court.

If you do not want to defend the action, you may consent to the claim.

If you do not enter an appearance or if you enter an appearance and then do not deliver a defence, the creditor may apply to the court for a judgment in default of appearance to get a judgment.

Once the judgment has been granted, the creditor may then apply for an execution order to enforce the judgment.

Proceedings in the High Court are generally started by means of a summary summons. Summons are often served in person. However, there are other ways a summons can be served.

The summary summons must include an indorsement of claim. This sets out the amount which the creditor claims is owed plus costs. It also states that, if you pay within 6 days, the proceedings will not go ahead (the proceedings are stayed). If the creditor is a licensed moneylender, this must be stated in the indorsement of claim. Other details about the loan agreement must also be stated, such as the rate of interest.

When you get a summary summons, you have 3 options:

1. Pay the amount owed plus costs within 6 days and the proceedings will not go ahead
2. Consent to judgment and ask for further time for payment
3. Indicate an intention to defend the proceedings by entering an appearance. You do this by delivering a memorandum in writing to the Central Office of the High Court within 8 days of the service of the summons.

If you do not enter an appearance, the creditor may get judgment in default of appearance from the Central Office of the High Court. In some cases, the permission of the Master of the High Court is required before such a judgment can be granted.

If you do enter an appearance and defend the proceedings, then the case is heard by a High Court judge and judgment against you may be given.

Sometimes, the creditor looks for an order of fieri facias at the same time. This is a court order instructing a sheriff to obtain the amount owed by possessing and selling the property of a judgment debtor.

The website of the Courts Service has detailed information on the court rules for proceedings in the District Court, the Circuit Court and the Superior Courts (that is the High Court and Supreme Court).