- by VisionNet on 01/06/2012

Consumers and business people had 304 judgments worth almost €34 million awarded against them in court last month as creditors fought to get debts paid, according to the latest figures from Vision-net, Ireland's leading business and credit risk analyst.

A total of 200 individuals were chased for unpaid debts worth €26.6 million, with the banks and the Revenue Commissioners accounting for €9.8 million and €3.4 million of these judgements, respectively.

This was the second-highest figure for consumer judgements awarded this year.

The value of commercial judgements registered against limited companies amounted to €7.3 million - the highest this year.

The EBS Building Society received one commercial and two consumer judgements last month with a combined value of €13.6 million.

Credit unions registered 26 judgements totalling €332,000 worth of bad debt.

Vision-net's figures show that, between May 1 and 28, 150 Irish companies collapsed, or five every day.

Of the companies declared insolvent, 109 were liquidated, 36 entered receivership, and examiners were appointed in five cases.

The average age of an insolvent company recorded last month was 12 years and seven months.

Last month, 126 companies held meetings of creditors - up 33% on the figure for the same period last year - owing more than €314 million to short-term creditors based on the companies' latest set of filed accounts.

That figure was boosted by Valentia Telecommunications, linked to Eircom through shared directors, which owes €235 million to short-term creditors.

The Worldspreads Group owe their short-term creditors €23.7 million while Harris Wireless Ireland have €13.6 million in unpaid debt.

Last month recorded 3,240 company and business start-ups - down 9% on last year.

At 1,070, the number of company incorporations was down 6% on last year, with the professional services sector recording almost one quarter of new companies, followed by the wholesale and retail sector with 12% and social and personal services sector with 11%.

Of the 12,530 companies Vision-net stress-tested last month, 55% showed signs of business failure while 29% were deemed low risk and 16% were judged to be at medium risk of collapse.

The Managing Director of Vision-net, Christine Cullen, said: "The huge amount of judgements awarded by the courts shows that individuals and businesses are struggling to repay their debts and creditors are fighting to be paid."

"This is slowing recovery in the domestic economy as companies across the enterprise ecosystem deal with the knock-on contagion impact of lingering debts which can strangle cash flow and cause stagnation in demand."

"Since it is only possible to gather information on registered judgments, it is likely that the scale of commercial and consumer debt is much higher."

"All of this reinforces the need for businesses and consumers to run reliable and rigorous background credit checks before making decisions with their money so that they are informed about the volatile trading environment in which they operate," said Ms Cullen.

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