By Karen Walsh


In order for a business or company to survive or become profitable, it is essential that any outstanding debts of the business are recovered. Farmers are no exception to this and should have a systems in place to ensure debts are paid to date.

It is recommended if you are a farmer, an agricultural contractor or a farming enterprise that you have a system in place for debt recovery. It is very important to have a written record of all transactions. If produce, machinery or services have been sold or provided, an invoice should be issued immediately after the sale or services have been carried out. It may be helpful to provide a written quotation to the debtor before the transaction or services takes place. It is preferable to have a written paper trail rather than an oral agreement while trying to recover a debt and it is advisable to engage in proper record keeping.

When initially trying to recover the debt, you should engage with the debtor by whatever means necessary in an attempt to recover payment. The most common methods would be either by the telephone or by email or writing to the debtor. The debt recovery process will be smoother if you communicate with the debtor and we would recommend you never use unlawful means, such as harassment, threats, or intimidation, to force the debtor to pay the debt. If you have exhausted all avenues and the debtor is not cooperating you may wish to consider taking legal action or initially threatening legal action with a view to having the debt paid. In order to do so, you should engage or consult with a solicitor.

Once a solicitor is instructed they can advise you of your potential options. An initial demand letter would normally be sent to the debtor asking that the debt is paid within a timeframe or court proceedings will be issued. If the debt is under €15,000 it is normally in the District Court and above that in the Circuit Court. If the debt is over €75,000 it will be a High Court matter.

There are time limits on bringing debt claims as set out in the Statute of Limitations Act, 1957. Usually a debt must be recovered within six years of the debt accruing.

The purpose of the court proceedings is normally to try and get a Judgment for the debt owed from the court. The debtor is entitled however to defend the proceedings. If the matter is defended, it is possible it will proceed to a court hearing unless a settlement can be reached.

If you are successful in obtaining Judgment, the next stage is enforcing it. This main methods of enforcement are:

  • Instalment Orders following by Committal Orders
  • Execution against goods
  • Attachment of earnings
  • Judgement Mortgages

In respect of the execution of goods, it will normally be sent to the Sheriff or County Registrar to enforce the Judgement. They can seize property or goods in order to execute the Judgement.

One of the most common enforcements procedures is an Instalment Order.  This normally allows for a debt to be paid in instalments. If the debtor has difficulty paying the debt they may be required to provide a statement of means which sets out all their assets, income, liabilities, and expenses and will show their net worth.  This assists the parties and the court in ascertaining what a viable payment structure would be. In the event that such an Order is breached, there is a possibility of applying for a Committal Order under the Enforcement of Courts Order (Amendment) Act, 2009.

If a Judgement is obtained against the debtor, the Creditor may register a charge against property that the debtor owns.  This is known as a Judgement Mortgage.  This is the equivalent of a Mortgage and can be registered as a Burden on the Folio in respect of the debtor’s lands.

If there is an outstanding debt on your books, you should take steps to recover the debt yourself. If the debtor is not cooperating, you should consult a solicitor and obtain legal advice as you may need to bring court proceedings to recover the debt.

Karen Walsh, from a farming background at Grenagh, Co Cork, is a solicitor practicing in Walsh & Partners, Solicitors and Commissioners for Oaths, 17, South Mall, Cork.
Telephone: 021-4270200

Disclaimer: While every care is taken to ensure accuracy of information contained in this article, solicitor Karen Walsh does not accept responsibility for errors or omissions howsoever arising, and you should seek legal advice in relation to your particular circumstances at the earliest possible time.