Didn’t see this covered elsewhere and am posting it here.
Many have commented on the draconian nature of punishment for non payment of debt.
It has been speculated that these sanctions were one of the reasons Ireland had such a low default rate.
Will this have a kcock on effect on people’s willingness to pay their debts?
Has a precedent been set or are the particulars of this case and the Woman’s illiteracy pertinent? irishtimes.com/newspaper/ireland/2009/0619/1224249119946.html
What implications for the state that has guaranteed the banks on not having any sanction to threaten defaulters? Would our sympathies be different if this was a major developer?
(I know I know if this was one of the great and good it would have never got to court)
It is only correct really. Locking up people over a Civil Debt while there is overcrowding and violent criminals being let go on temporary release is insane. The law should have been changed long ago to allow for the attachment to earnings and Social Welfare payments. Why this has not been done years ago is an amazement to me. I remember Jim O’Keefe the, the then FG Justice spokesperson, drafted a Bill to do this but the government defeated it saying they were going to bring in there own Bill but they never did so. Well they have to now as there is currently no penalty to enforce the Order of a Court in this matter as it now stands.
There’s a significant difference between being unable to repay a debt and not wanting to repay a debt. In the first case jailing someone obviously won’t help and in the second case the court should have the power to relive people of their assets or income in order to satisfy the debt. There’s no need for a jail term in either case.
That’s kinda the problem now, ain’t it, there is no mechanism for legal enforcement of a debt. While prison is probably not the best sanction for debt non-repayment, some cantion or means of adressing this is required.
I guess the alternative is for creditors in this situation to sell on these debts to less tolerant credit institutions or employ more pro-active collection agencies, who may be less concerned with the legal nicities.
Maybe Anglo’s new owners could sell on some of their dodgy directors loans. If they do may I take the opportunity to wish Mr FitzUpperCaseP the best of luck, or as a thespain might put it “Break a leg Seanie”.
Has the constitutionality of the bankruptcy law been tested yet?
12 years is a savagely long time, and horribly disproportionate, to be attaching somebody’s wages. By having a disproportionately vicious punishment for bankruptcy, it takes the pressure off lenders to be prudent in their lending.
Would lenders have gone bananas lending quite so much if the bankruptcy penalty was not so awful in Ireland?
Hard to say, but let’s have the Supreme court make the judgement.
I’d imagine vested interests would prefer a shorter bankruptcy period than twelve years, they got too many units for too fewer punters as it is you know.
I was glad when i heard this today. One way or another we’ll catch up with the twentieth century, who knows maybe Ireland will catch up with the 21st century in my lifetime although I won’t hold my breath.
The judgement is not on the courts website yet, but from what I gather from the newspapers it is the way in which the statute operated, rather than the principle of jailing people who don’t abide by a court order which is unconstitutional.
If it’s a circuit court or high court order they can still apply for a garnishee order, seizure by the sheriff, judgement mortgage and ultimately attachment and committal. In the district court, they can still make an order for installments or send the sheriff out (possibly they could get a judgement mortgage of a district court debt too). In any event, there are still enforcement procedures, and it is still possible to go to jail if you refuse to comply with a court order. However, the harsher system used in the district court under the enforcement of court orders acts is no longer valid.
A similar system with appropriate safeguards such as right to legal aid, presumption of innocence, correct service etc may be brought in.
It’s about time this outdated Dickensian practice was aborted altogether. The simple fact is that the lending institution in Monaghan was horrendously run. At one point, all you needed was a pulse to get a loan. They’ve lost alot of money and have been scammed by transient borrowers big time as well. So many cases became before the local court that the Judge finally had to ask about the lending standards. As a result many such claims were dropped by the lending institution.
Allowing either jailing or unconditional attachment of income is not an acceptable answer. Every lending institution has a moral and fiduciary responsibility to lend correctly and carry out their due diligence. The emergence of easy credit has been and will continue to be the scurge of the wage earner. The developement of predatory lending by a host of credit institutions is the primary cause of our modern ills as now evidenced by the state of the economy.
Deciding to jail people or garnish income unconditionally is just a get out of jail card for unscrupulous lending practices. The first task of a judgement should be to indentify fraud. Fraud should be a jailable offence. Barring fraud, garnishment of wages and/or attachment of assets, where a borrower steadfastly refuses to pay, seems an acceptable way to proceed.
Concerning job loss, it is in the best interests of the bank and the state for a moritorium period to be introduced while the borrower finds new employment. Creating a summary garnishment against future wages wouldn’t prove beneficial to a job applicant. A wait and see approach is best here.
As for garnishing unemployment assistance payments, well what brave intellect came up with that brainwave? The taxpayer either pays for fraud (borrower lied), bad luck (borrower get sick or losses job) or the lending institutions have calculated the maximum lending limits whereby through bad luck, the taxpayer foots the borrower’s bills. (Needless to say, if the dole is sufficiently garnished, the unemployed will have to declare bankruptcy or starve.)
Anyhow, the Irish tax payer would never stand by and pay for banks’ bad lending practices. Or would they?
In some eastern european states it is a criminal offence not to repay a bank loan, and can often be dealt with by 2 years or more in prison.
The courts need to be able to force someone who is deliberately refusing to pay a judgement even though they are capable of doing so to either pay it or else go to jail. However, the system shouldn’t jail someone because they don’t have the money. It is not a get out of jail card for unscrupulous lending practices - if they have someone put in jail for non payment of a debt, that doesn’t help the banks in any material way.
The unconstitutional provision wasn’t just for banks, it was for any plaintiff who had obtained a court order but the defendant refused to pay.
The simple point I was making is that jail is an absolutely irrational reaction to non-payment of debt. There is a need to distinguish between the inability to pay as opposed not wishing to pay. In either case, jailing someone doesn’t solve the problem. I believe jailhouse wages are fairly low these days.
The greater moral hazard, and I have this from some bankers, is that they know the public will be saddled with outdated and onerous strictures on their debts in regard to default. This is why bankers willingly lend to Irish borrowers, and possibly over lend to Irish borrowers.
Having been in banking and knowing quite a few of the more modern breed of banker, I find it is the consumer who needs protection. Not the other way around.
A rational system takes into account why someone is not paying. If the person is working and for some reason refusing to pay, garnishment of wages is more logical than locking them up. Jailing the destitute is Dickensian. Due diligence and old fashioned prudence are the best risk aversion techniques available to lenders.
As for the last point made, one might want to note that sarcasm and irony come into play.