Selling debt to collection company

[murphaph]

Hi all,
Does anyone have any experience or comments on selling a 10-20k debt (to be awarded by the circuit court quite soon hopefully)?

I hear so many stories of people getting judgements after lengthy legal proceedings, only for the debtors to leg it or refuse to pay. Is it an easier option to cut your losses and sell the entire debt to a collection firm, or is it maybe better to actually try to collect with a firm?

 

[bond-007]

Is it a limited company or a person you are chasing?

The usual scenario is for the debt to be sold to the collection agency prior to legal action. As you have started legal proceedings selling the debt would be unwise as it could cause legal problems down the road after judgement has been obtained.

Really once you have gone the legal route the legal route is your only way to make them pay. As for them legging it or refusing to pay, you can use the courts to find out their income etc and get instalment orders against them. Be warned where the debtor can prove they have a low income/social welfare the judge will be very reluctant to make any order compelling them to pay. If this were to happen you would be better off cutting your losses and writing off the debt.

 

[murphaph]

I'm not suggesting selling the debt before the judgement is obtained. I'm talking about getting the judgement and then sellng, rather than continuing after them. A judgement afterall is only a piece of paper, not the money they owe. I hear of so many folks who get judgements and never see any money. The sherrif by all accounts is next to useless.

 

[bond-007]

Yes, you are right the sheriff is a waste of time. All that happens is he will go out to the debtor and ask him for the money. The debtor will say "I don't have it" and off the sheriff goes and you get no money.

Personally speaking, selling the debt after judgement could be a bad move esp if the debtor is on social welfare/ or has a very low income. Also unless there is a REAL chance of them paying up the debt agency will be unwilling to buy. Your best best is not to sell but to use the agency to try to recover the money.

How do you know that he does not have loads of other debts and judgements already? If he does you will be at the back of the queue and are likely to recover very little.

Unless this guy has a 500k house knocking around you could be on a hiding to nothing.

 

[murphaph]

Yes, you are right the sheriff is a waste of time. All that happens is he will go out to the debtor and ask him for the money. The debtor will say "I don't have it" and off the sheriff goes and you get no money.

Personally speaking, selling the debt after judgement could be a bad move esp if the debtor is on social welfare/ or has a very low income. Also unless there is a REAL chance of them paying up the debt agency will be unwilling to buy. Your best best is not to sell but to use the agency to try to recover the money.

How do you know that he does not have loads of other debts and judgements already? If he does you will be at the back of the queue and are likely to recover very little.

Unless this guy has a 500k house knocking around you could be on a hiding to nothing.

That's what I'm worried about..Luckily however it is a judgement against two individuals, not the company they own as they signed the relevant contracts before they had formed a company. All court correspondence refers to the two individuals. They are not on sw (AFAIK) and run a successful business (well, it's successful enough for them to have taken on an employee some months back!). They have assets in the company (equipment, no premises) and they both own their own homes (afaik).

Any idea of the best course of action after the circuit court awards against them? What sort of fees would a debt collection agency want, a % of the total or fixed sum? Any recommendations on a good (ie successful) agency?

 

[bond-007]

You won't be able to touch the assets of their company as it is not the company you are suing. So sending the sheriff will be a pointless endeavour.

Your best course of action would be to register the judgement against their properties, this will prevent them selling or re-mortgaging it until you are paid.

Other than that you are looking at applying to the district court for an instalment order against them. Best you could hope for is €100 per week. And of course if they produce evidence that they can't pay because of sick children etc you won't be awarded very much. It is not unknown for orders for as little as €10 a month to be awarded. If that happened you would be stuffed.

Have a look at a few of these sites:
http://www.traceysolicitors.ie/debt-collection.html
http://www.croskerrys.com/
http://www.eircollect.com/
http://[SIZE=-1]www.intrum.ie[/SIZE]
http://[SIZE=-1]www.eccreditcontrol.ie[/SIZE]

 

[murphaph]

You won't be able to touch the assets of their company as it is not the company you are suing. So sending the sheriff will be a pointless endeavour.

Hmmm, what's to say what assets are owned by them though? They had at least some assets purchased before the limited company came into being, so would those assets not be their personal property? Is it up to them to prove that asset x belongs to the company or up to us to prove it belongs to Mr. Y and Mr. Z?

Your best course of action would be to register the judgement against their properties, this will prevent them selling or re-mortgaging it until you are paid.

That sounds eminently sensible. Is that done in a seperate court procedure or is it a formality once a circuit court judgement is made in my favour?

Other than that you are looking at applying to the district court for an instalment order against them. Best you could hope for is €100 per week. And of course if they produce evidence that they can't pay because of sick children etc you won't be awarded very much. It is not unknown for orders for as little as €10 a month to be awarded. If that happened you would be stuffed.

Ah you have to love this country and its laws which always seem to favour the wrongdoer.

Have a look at a few of these sites:
http://www.traceysolicitors.ie/debt-collection.html
http://www.croskerrys.com/
http://www.eircollect.com/
http://[SIZE=-1]www.intrum.ie[/SIZE]
http://[SIZE=-1]www.eccreditcontrol.ie[/SIZE]

Thanks for those bond. It's because the outlook is bleak that I wondered would ot not be better just to sell the entire debt and be rid of it. When the alternative is a tenner a week it seems a no-brainer to me.

 

[bond-007]

Hmmm, what's to say what assets are owned by them though? They had at least some assets purchased before the limited company came into being, so would those assets not be their personal property? Is it up to them to prove that asset x belongs to the company or up to us to prove it belongs to Mr. Y and Mr. Z?

Yes that burden will be on you. No doubt they moved all these assets to the company upon formation for a nominal amount, €1. In any event the sheriff will not be interested as he cannot remove tools of trade regardless of ownership. I have found that the sheriff is very inefficient when it comes to collecting money.

That sounds eminently sensible. Is that done in a separate court procedure or is it a formality once a circuit court judgement is made in my favour?

It is a formality once you have the judgement. You get a solicitor to do a land registry search on the two debtors and the solicitor applies the judgement to any property that they own in their own names or in joint names.

 

[murphaph]

Thanks for the input. I'm sure our solicitor who is handling it will have suggestions but it's always good to get other ideas. Does the sherrif seize motor vehicles very often? I take it people simply register such things in friends' names to avoid having them seized.

That croskerrys site is most informative. Interesting that you revert to the district court for installment orders, regardless of the judgement court.

 

[bond-007]

To be honest the sheriff will rarely seize anything. The rules on what can and cannot be seized are so complex. They won't seize motor vehicles as they are often a tool of business or the debtors only means to work. Indeed the smart debtors have everything in the wife's name. You have to be very careful when assumptions as to ownership of property etc.

Interesting that you revert to the district court for installment orders, regardless of the judgement court.

Indeed, if you get a €1 million judgement in the High Court you will be forced to go to the local district court to enforce it. As said earlier you could end up getting a tenner a week.