Two Notable And Recent Developments In Debt Collection

Two recent developments may have rendered the Irish legal system less attractive to creditors. We examine the scope of these developments and the likely impact on debt collection activity in Ireland.

Rate of interest of judgment debts falls by 6%

The rate of interest on judgment debts has been reduced from 8% to 2%, with effect from 1 January 2017, in accordance with the Courts Act 1981 (Interest on Judgment Debts) Order 2016 (S.I. No 624 of 2016) (the "Order").  

The Minister for Justice, Frances Fitzgerald had flagged in mid-2016 that she intended to review the rate of interest on judgment debts, commonly known as "Courts Act interest". 

The interest rate applicable on judgments given on or after 1 January 2017 is now 2%. The rate of 8% interest will accrue up to 31 December 2016 on applicable judgments made prior to that date.