15 February 2025
By Mary Bermingham
mary@TheCork.ie
South Munster Citizens Information
Rules for Different Types of Debt
Today Ciara O’Gorman, Development Manager with South Munster Citizens Information Service talks about debt and the rules around different types of debt. “If you have debt you have not repaid, what happens can depend on the type of debt it is. For some types of debt, there are particular rules. These include debts due to taxes, social welfare overpayments, legal obligations, such as maintenance payments, local authority rent or mortgages, utility charges, charges set by law such as TV licences or dog licences and court fines.”
Taxes
If you do not pay the tax you owe, Revenue has a range of options for collecting the tax due. The main ways Revenue collects overdue taxes are:
- Phased payment arrangements
- Collection by a Sheriff
- Court action
- Attachment of a debt.
Phased payment arrangements
“If you owe money to Revenue for unpaid taxes, you can apply for a phased payment arrangement where you repay your tax debt in instalments. Interest is charged on the amount you owe. If you are paying income tax through Pay As You Earn (PAYE) and you underpay in a particular year, you may be able to repay the amount due by having your tax credits reduced in a following year. It’s worth noting that in general, interest is not applied to these repayments.”
Collection by a Sheriff
If you get a final demand to pay taxes due and you do not respond, Revenue can refer your case to a Sheriff to enforce the debt. A court order is not required. Ciara explains “The Sheriff is given a warrant, which is the legal authority to collect Revenue debts, including by seizing goods if necessary. A warrant is valid for 12 months. However, if the Sheriff does not collect any of the debt within 6 months, the certificate must be returned to Revenue. The Sheriff has the authority to negotiate a payment arrangement, with you. The repayment arrangement must be for 2 years or less. Remember, once your case has gone to the Sheriff, you must then deal with the Sheriff. You are no longer able to deal with Revenue staff. Revenue Sheriffs are officers of the courts and are responsible to the courts.”
Court action
Alternatively, Revenue may take legal action on a debt by referring it to a solicitor. Revenue will look for a court judgement that the amount is due. Revenue can then seek further legal action to recover the debt.
Attachment of a debt
If Revenue has issued a final demand for tax you owe and you do not agree to pay it, Revenue has powers of attachment of debt. This means that if you are owed money, Revenue can require that the money owed to you is paid to Revenue instead. This could include your salary from an employer, money due to you from a state agency and/or money in your bank or credit union account. This does not require a court order.
Property taxes
Local Property Tax
If you are responsible for paying Local Property Tax (LPT), and you do not make a return, you will owe the amount that is estimated by Revenue. If you do not pay the tax, Revenue may collect it by:
- Deducting it from your salary or pension
- Keeping any refund of tax you are entitled to
- Adding a surcharge to your income tax or Capital Gains Tax
- Using a solicitor or sheriff.
If Revenue cannot collect the amount of LPT due, then a charge will be put on your property. This means that you will not be able to sell your property without paying the tax and any interest or penalties due.
Social welfare overpayments
“If you get money from the Department of Social Protection that you should not have, you must repay it. This is the case whether the overpayment was because of a mistake by you, a mistake by the Department or fraud. For more information on this, please contact your local Citizens Information Centre where staff will be happy to discuss your options.”
Maintenance
“CIS staff regularly get queries about what you can do if a parent, spouse or civil partner falls behind with maintenance payments due under a maintenance order,” says Ciara. “You can apply to the court for an attachment of earnings order. If the person is in employment, their employer will deduct the maintenance amount from their wage or salary. If the person is self-employed, you can apply for an enforcement order. If the person lives abroad, you can contact the Central Authority for Maintenance Recovery. You will need to provide the person’s address.”
Local authority arrears
If you fall behind in your local authority rent, you should contact the local authority to discuss the arrears. Some local authority rent schemes may allow for a rent reduction in cases of hardship. If you do not contact your local authority about the arrears, the local authority may start the process to evict you. It must warn you before it starts the process. If you have a loan from a local authority and you are having difficulty making your repayments, you may be able to make an arrangement with the local authority.
Utility charges
Suppliers of electricity and gas must have codes of practice for dealing with customers who have difficulty paying their bills and build up arrears. Each supplier must publish these codes of practice – you can check on the website of your electricity or gas supplier. If you are having difficulty paying your utility bills, it is important to contact your supplier as soon as possible. Your supplier may agree to set up a budget plan, spread your payments across the year or install a pre-paid meter.
TV licences
You must pay your TV licence to An Post. An Post keeps a database of every premises that should have a TV licence. The database is regularly updated. If you have not paid your TV licence, you may receive a notice from An Post to warn you that you could be prosecuted if you do not buy a TV licence. You are given 28 days to pay. An Post may serve you with a fixed payment notice if you have still not paid after receiving 2 notifications. You then have 21 days to buy your TV licence and pay the fixed penalty fee. The penalty fee is capped at one-third of the licence fee. If you do not buy your TV licence and pay the fixed penalty fee, you may be prosecuted in court. It is an offence not to have a TV licence if you have a TV set. If convicted, you could be fined €1,000 for a first offence and €2,000 for subsequent offences.
Dog licences
If you have a dog over 4 months old, you must have a dog licence. If you do not have a licence for your dog, you could face an ‘on-the-spot’ fine. If you do not pay this fine you can be prosecuted. If convicted, you could be fined up to €2,500 or up to 3 months’ imprisonment (or both).
Court fines
If you are ordered to pay a fine, you have the option to pay in full or by instalment. Payment in full can be made at any court office, An Post office, or online within the time allowed by the judge. You can pay by instalment only if the fine is more than €100. If you do not pay a fine, you can be brought back to court. The judge may make an attachment order or a recovery order, to collect the money from you directly or could order you to do community service. If no other options is appropriate, or if you do not comply with a Community Service Order, you could be sent to prison.
Further information on this and other topics is available from Cork City Centre CIC in Cornmarket Street, open to the public on Mondays, Tuesdays, Thursdays and Fridays from 9.45am to 12.30pm and Wednesdays from 2pm to 4pm, Tel 0818 07 6950 (Lines open Mon-Fri 10am-4.30pm). Blackpool CIC is also open to the public on Tuesdays and Thursdays from 10am to 1pm and 2pm to 4pm, Tel 0818 07 6890 while Hollyhill CIC is open Mondays and Fridays from 10am to 1pm and 2pm to 4pm, Tel: 0818 07 6850.
Information is also available from the Citizens Information Phone Service Tel: 0818 07 4000 (9am – 8pm, Mon – Fri) or online at www.citizensinformation.ie