If you owe money to someone else, then you are a debtor and the other person is a creditor. If you fail to pay a debt, your creditor can go to court to get a judgment that you owe the debt.
Getting a judgment means that the creditor is now entitled to use various mechanisms to get the money from you. This is known as enforcing a judgment – the legal term is execution of the judgment. There are several different ways of enforcing a judgment. The creditor chooses the means and can use several different means at the same time.
In general, once the creditor has a judgment order, the judgment can be enforced. Enforcement orders can be issued by court offices – the creditor does not have to go back to court for the order. Creditors have 12 years from the date of the judgment to look for enforcement orders. However, if the judgment order was issued 6 or more years earlier, the creditor may have to apply to court for leave to issue execution. Once issued, enforcement orders are generally valid for a year and may then be renewed.
The courts can grant a stay of execution. This means that the enforcement of the debt is halted for a period. A stay of execution may be granted, for example, if you can show that your inability to pay is not your fault. You cannot get a stay of execution if you have not engaged with the proceedings.
This involves the creditor registering the judgment in the Central Office of the High Court. Judgments from the District Court, the Circuit Court and the High Court may all be registered. Registering the judgment does not directly enforce the judgment. It does, however, publicise the fact that there is a judgment against you and, as a result, means that you are unlikely to be able to borrow further. Lists of judgments are published by credit reference agencies (for example, in Stubbs Gazette and some newspapers).
Before registering a judgment, the creditor must tell you that it is intended to register and give you an opportunity to pay the debt.
The following are the main ways of enforcing judgments:
Other ways of enforcing judgments include attachment of debts, appointment of a receiver and bankruptcy proceedings, but these are rarely used for consumer debts. They are briefly outlined in ‘Other methods of enforcing judgments’ below.
Execution against goods is one of the main ways of enforcing a judgment. It is sometimes called distress against goods. It means that the creditor gets an order from the court which directs the Sheriff or County Registrar to seize your goods and sell them in order to raise the amount of money which you owe plus costs.
Sheriffs enforce judgments in counties Cork and Dublin while County Registrars enforce them in all other places.
Sheriffs are self-employed people who are paid for their enforcement work on a commission basis. The system is called 'poundage'. The fees that they get are set out in Statutory Instruments. The current one is the Sheriff’s Fees and Expenses Order (SI 644/2005) made under the Enforcement of Court Orders Act 1926. This provides for various fixed fees and a scale of fees related to the amount involved. This is 5% of the first €5,500 and 2.5% of the balance. It also provides for the payment of various expenses incurred in the enforcement process.
County Registrars are civil servants whose main job is to organise the business of the Circuit Court in their areas. (They are also Returning Officers for elections and referendums.)
As well as County Sheriffs in Cork and Dublin, there are Revenue Sheriffs who enforce debts owed to the Revenue Commissioners. They have the power to collect tax debts. They can do this on the basis of a certificate of liability issued by the Collector General (the official in the Revenue Commissioners who is responsible for collecting taxes) and do not need a court order. Revenue debts can also be collected in the normal way if there is a court order.
The Sheriff or County Registrar does not have to give notice of intention to seize your property or goods in order to execute a judgment. Their duty is to the creditor, so they cannot take your circumstances into account. Revenue Sheriffs have specific powers to make an instalment arrangement with you.
The creditor may apply to court to have you examined about your assets so that it can be established what assets you have that are available for the execution of the judgment. The Sheriff/County Registrar has the power to go onto your property in order to seize your goods. They must make reasonable efforts to do this peaceably and without violence but they may make a forced entry.
The law provides that the Sheriff/County Registrar may not seize certain goods but this is effectively meaningless because of the amounts allowed. They may not seize your necessary clothes and bedding and the tools of your trade provided the value of such necessities is not more than €19. In practice, goods with a low resale value are unlikely to be seized.
The Sheriff/County Registrar must account to the court for the goods seized. If no goods are found, they make a return of nulla bona, literally meaning "no goods".
If the Sheriff/County Registrar does seize your goods, they must, within 24 hours, give you an itemised and signed list of the goods seized. They may then sell the goods by public auction – this can happen at any time from 2 days after the seizures. In practice, you are usually given warning of the impending sale.
The instalment order procedure is mainly used by small creditors such as shops and credit unions. It can be used for judgments given in the District, Circuit or High Court.
It is also used by creditors in family law proceedings, mainly for the enforcement of maintenance orders. If you are a family law debtor - for example, if you have a maintenance order against you which has not been met - your creditor can get an attachment of earnings order.
Instalment orders are governed by the Enforcement of Court Orders Acts 1926 - 2009 and Order 53 of the District Court Rules.
Your creditor can apply to the District Court in the district in which you live to have you attend the court in order to establish your means. The judge may then order payment in full or payment in instalments, taking account of your means.
If you fail to meet the instalment order, the creditor may look for a committal order which would commit you to prison.
Upcoming changes: The Civil Debt (Procedures) Act 2015 provides for abolition of the imprisonment of debtors for non-payment of civil debts. This is due to come into effect shortly.
The Enforcement of Court Orders (Amendment) Act 2009 sets out the procedure for committal orders. This effectively provides that you may be imprisoned for failure to pay debts only if you can afford to pay but refuse to do so.
The process involves a summons to appear at the District Court. This is issued by the District Court clerk at the request of the creditor. The summons must clearly set out:
You are required to prepare a statement of means and lodge this at least a week before the hearing is due to take place.
If you fail to turn up, without reasonable excuse, a judge can either issue an arrest warrant (this orders the Gardaí to bring you before the court at the earliest opportunity) or adjourn the hearing. If you are arrested and brought to court, a date is fixed for the hearing. The judge must make clear to you, in ordinary language:
At the hearing, both you and the creditor may give evidence. The court has a number of options. It may vary the instalment order. Alternatively, the court may ask you to engage in mediation. The Money Advice and Budgeting Service (MABS) may be used for such mediation. The third option is to make a committal order (for a maximum of 3 months). This can come into effect immediately or at a later date. A committal order is an order to the Gardaí for your arrest and imprisonment.
The creditor is obliged to establish, beyond reasonable doubt, that you have means but you are wilfully refusing to pay.
The court has the power to grant you legal aid in accordance with the rules governing the criminal legal aid scheme.
At present, attachment of earnings is used only for orders of maintenance of spouses and children.
The Civil Debt (Procedures) Act 2015 provides for the attachment of earnings or deductions from social welfare payments, as appropriate, for the purpose of the enforcement of debts.
This legislation will apply to debts that are more than €500 and less than €4,000 in value, and for which a court judgment has been obtained. It is due to come into effect shortly.
The creditor may register a charge against property owned by you. The effect is the same as taking out a conventional mortgage. You have to pay off the judgment mortgage when the property is sold. Read more in our document on home repossession.
If you owe money to a creditor and another person owes money to you, then your creditor can get an order which attaches the debt owed to you by the other person. This is known as a garnishee order. Generally, it is used only in cases where there are no goods to be seized to satisfy the judgment. It is relatively rarely used in cases of consumer debt. The Revenue Commissioners have specific powers of attachment which can be exercised without a court order.
A receiver may be appointed over some of your assets or over future income such as rents, income of a trust fund or a pension. The law in this area is complex but it seems that a receiver cannot be appointed over future earnings.
If you are unable to pay your debts, you may petition the High Court to be declared bankrupt. Alternatively, your creditor may apply to have you declared bankrupt if certain conditions are met. Read more about bankruptcy.