Sharp rise in debt judgments against consumers and businesses

The number of judgments made against consumers in the courts shot up during the second quarter as did the value of registered debt, new figures show.

Data prepared by Registry Trust indicates that 307 judgments were registered against consumers in the April to June period, up 358 per cent on the same quarter a year earlier. The total value of registered debt owed by consumers was over €30 million, some 16 times higher than the €1.8 million seen in the prior year.

The primary reason for the jump in the number and value of judgments is that they were kept artificially low last year due to interventions designed to protect households from the financial impact of the coronavirus pandemic.

The average value of consumer judgments registered in the second quarter was €98,780, more than three-and-a-half-times the €27,523 seen in the period last year. However, the median value was 20 per cent lower at €6,050 versus €7,571. Registry Trust said this suggests a pattern of more, smaller judgments with a number of very large judgments pushing up the overall average.

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Judgments against Irish businesses also rose significantly in the second quarter, nearly doubling from 63 last year to 124 for the same three-month period in 2021.

The total value owed was €1.4 million, more than three times the €440,462 recorded in the second quarter of 2020. The average value of business judgments was up 62 per cent from €6,991 to €11,297. The median value also rose from €4,876 to €5,709, an increase of 17 per cent.

“Government and regulatory interventions, and creditor forbearance, were clearly protecting Irish consumers and businesses from the full financial effects of Covid last year,” said Mick McAteer of Registry Trust.

“But, judgment numbers would now seem to be on the rise again, creating concerns that the Covid financial crisis is far from over for vulnerable consumers and businesses,” he added.

The collated figures are based only on judgments registered at the request and cost of creditors at the Four Courts in Dublin from courts across the Republic and therefore provide only a partial picture of debt.

Judgments can be removed from the register if paid in full within one calendar month of the issue date. If fully paid outside the one calendar month, the defendant can apply to have the judgment marked as ‘satisfied’ to improve their credit rating.