A HIGH Court judge said moves by financial services company Friends First to pursue people with outstanding loans by petitioning for their bankruptcy were “fairly draconian”.
Mr Justice Brian McGovern criticised the company for using the bankruptcy court to pursue some “not very substantial debts”.
Friends First sells protection, pensions and investment products in Ireland.
The company has been pursuing people for outstanding loans provided by Friends First Finance, the group’s asset finance division.
The division was established in 1997 and developed a strong presence in retail lending, but was closed down following the financial crash. The group, owned by parent company Eureko, now focuses on core insurance activities.
When a person is adjudged bankrupt, his property and assets are transferred to a court official, known as the official assignee, to be sold. Once sold, the costs, expenses, court fees and priority debts are paid. After this, the net proceeds are distributed to creditors.
The official assignee may also appropriate the wages of a bankrupt person to pay creditors, and bankrupts must inform the official assignee if they want to leave the country. Bankruptcy can last up to 12 years unless debts are paid to the satisfaction of creditors.
Over a dozen cases involving Friends First Finance were before the bankruptcy court yesterday. Sums being pursued were as low as €17,000.
Commenting, Mr Justice Brian McGovern said he was seeing a substantial number of such cases in the bankruptcy list.
“I’m wondering if there is a better way for Friends First to pursue the debts instead of bringing numerous cases to the bankruptcy list which is so difficult to get out of,” Mr Justice McGovern said.
