Debt collection in Northern Ireland

The process of debt collection in Northern Ireland.

A case always starts by being dealt with out of court. This means that our UK debt collection agency uses its experience and specialist knowledge to get the debtor to pay without the need to take legal action. This includes letters, telephone contact, negotiations and persuasion techniques.

In most cases, the end of the Northern Ireland debt collection process at this stage is achieved by the debtor paying. (The fact that a local debt collection agency makes the demand has a major, major impact on the debtor’s willingness to pay.)

Should payment not be made, an assessment of the debtor’s financial situation is made to determine whether it is appropriate to proceed with legal debt collection in Northern Ireland.

“Judicial” Debt Recovery in Northern Ireland.

Which court in Northern Ireland should you go to with debt collection.

In civil cases in Northern Ireland, the County Court or the High Court of Northern Ireland is the court with jurisdiction. In some cases also Magistrates’ courts (e.g. minor debt collection cases in Northern Ireland).

For debt collection claims in Northern Ireland of less than £30,000, then the general rule is that a County Court is the competent court for your case. For claims higher than that, the High Court will normally have jurisdiction. In addition, for claims under £3,000 there is a special simplified procedure. A small claims procedure, which is a simpler and more informal process, which is intended to be cheaper, quicker and easier for creditors than the ordinary court process. The County Courts are responsible for the Small Claims process.

Starting a case: to start a legal case for debt collection in Northern Ireland, a creditor must submit the application in writing to the appropriate court office, together with the relevant court fees. Normally, the competent court is the court where the debtor resides or carries on business. The documents should be submitted in English

Do I have to pay court fees? Yes. Proceeding with judicial debt recovery in Northern Ireland involves certain costs which must be paid at the time of the summons and at certain points in the legal process. In the County Courts there is a scale of costs depending on the size of the claim in the writ. In the High Court, costs are assessed on the basis of the work done. The general principle is that the losing party is responsible for its own costs and those of the other party in the dispute.

Judgment by default.

Where a summons is left unanswered by a debtor and the debtor does not contest the claim in the summons, there is a possibility in Northern Ireland court proceedings to apply for a default judgment. This is a judgment issued by the court in favour of the creditor, simply because the debtor does not enter a defence and contests the liability to pay.

This possibility for the creditor to apply for a default judgment is a normal integral part of all civil proceedings in Northern Ireland.

It works like this:

High Court: a debtor has 14 days to make a statement of position on the claim.

In the County Court: for civil cases here, the debtor has 21 days to notify the court of their position.

What do creditors need to do to get a default judgment? Should a debtor fail to submit a statement of defence within the above time limit, the creditor has the option of asking the court to issue a default judgment.

Which court? A creditor must apply to the same court where the proceedings were initiated.

What happens if the debtor lodges a statement of opposition and defence within the time limit? Then the legal process continues, and the case is treated as a dispute.

Small claims procedure.

As mentioned, there is a special procedure for small claims in Northern Ireland, for claims of less than £3,000. It is a simple procedure with standard forms for applications and responses.  This procedure is ideal for small debt collection claims in Northern Ireland.

The proceedings are very informal and there are no strict rules of evidence. This allows the judge to easily control and facilitate the process. The idea is that the parties can easily follow and participate in the process without the need for a lot of legal preparation.

Enforcement of claims in Northern Ireland.

Enforcement in Northern Ireland can be said to be the last step for legal debt collection in Northern Ireland. It refers to situations where a creditor has gone through a legal process and obtained an exequatur against the debtor demonstrating that the debtor has a debt to pay, but where the debtor nevertheless continues to fail to pay what it owes.  A possibility then exists for the creditor to apply for enforcement to the Northern Ireland courts to obtain assistance from the authorities in obtaining payment of his claim.

In Northern Ireland, enforcement is not the responsibility of the courts, but of a central authority called the Enforcement of Judgments Office.

The process for applying for enforcement is as follows: before an application for enforcement can be made to the Enforcement of Judgments Office, the creditor must notify the debtor of the intention to apply for enforcement. Such a notice is followed by a 10-day deadline during which the debtor is given the opportunity to pay the debt. If the debt is not paid within this time limit, the creditor can proceed with the application for enforcement.

The procedure is then started by the authority sending the debtor an attachment order prohibiting the disposal of the debtor’s assets. An official of the Enforcement of Judgments Office then starts the process of identifying the debtor’s assets.

On the basis of this report, a senior officer in the office, or alternatively an officer known as a ‘master’, or a ‘chief enforcement officer’, decides what to do next in the case and whether any of the debtor’s assets can be seized and disposed of.

For debt recovery cases in Northern Ireland, the main enforcement actions concerned are:

“Instalment Order” = An order that the debtor pay the debt in instalments. A payment plan is thus set up with the debtor.

“Attachment of Earnings Order” = This is a measure whereby money is deducted from the debtor’s salary on an ongoing basis.

“Order of Seizure” = Involving the seizure and sale of a debtor’s assets for the benefit of the creditor. 

“Order Charging Land” = This order is most often used for large debts and is generally used in conjunction with another enforcement method. The creditor is entitled to a portion of a property and may be paid for the claim upon sale.

“Order Appointing Receiver and Order Under the Crown Proceedings Act” = A “Chief Enforcement Officer” is appointed to receive all payments to the debtor. This may include inheritance, rent collections, etc.

“Attachment of Debts (Garnishee) Order” = Means that if the debtor in turn has its own debtors who owe it money, these debtors are ordered to pay the debt directly for the benefit of the original creditor.

Insolvency proceedings in Northern Ireland.

As a sidetrack in the process of debt collection in Northern Ireland, it should also be briefly mentioned that insolvency proceedings may sometimes be called upon. These are situations where a Northern Irish debtor is unable to pay his debts. Bankruptcy proceedings may then be required if the company is to be wound up. In such cases, the management of the company is taken over by an insolvency practitioner. This procedure exists to ensure that all creditors with a claim against the debtor are treated fairly.