What happens if I can’t pay a Debt?
If your creditor hires a debt collection agency or solicitor to sue you, and you fail to defend a summons for recovery of a debt, a creditor gets a judgment from the court. When you can’t pay the judgment and still owe a debt the next step for the creditor is to seek enforcement. There are various procedures then for summoning you before the court for the purposes of ascertaining what property and assets you own.
The matter will be listed in court for examination of your means to determine what you can afford to pay by installments. If you don’t give evidence, the judge will just decide on a weekly amount but won’t have any idea of what you can afford. If you are to appear in court, make out a financial statement (income, expenses and debts). Leave it into the courthouse for the attention of the judge a couple of days before the hearing. Send a copy to the solicitor for the creditor too. Often, the creditor may decide not to proceed if you don’t have any reasonable prospect of paying off the debt.
A new alternative is to avail of the out of court debt settlement schemes under the 2012 Personal Insolvency Act. These non-judicial processes stop initiation of Court proceedings, or the progress of proceedings; enforcements and recovery of goods and bankruptcy proceedings. The debtor is not required to make onerous payments and the schemes are processed through the Insolvency Service Ireland. (www.isi.gov.ie)