Irish Credit Unions awarded €4.2m in Judgements

Wednesday, April 17, 2013

The latest figures show that Credit Unions have been awarded €4.2m in judgments, by the Irish courts, for non-payment of debts by its customers so far this year.

This amount has been secured through the award of 190 separate judgments to the credit unions already this year.
 Despite the average judgment award working out at just over €22,431, a number of judgments were far in excess of this.

The highest of these was a judgment awarded to a credit union in Tipperary which was for €749,640.

The top 4 highest judgments awarded amounted to €1.8m which is 42% of the overall value of awards made to credit unions so far this year.

A total of 16 credit unions have already suffered losses of approximately €15 million following the Government’s decision to liquidate the former Anglo Irish Bank, subsequently called the Irish Bank Resolution Corporation (IBRC).

Although each of the 16 credit unions had received €100,000 from the State’s Deposit Guarantee Scheme, some credit unions invested €2 million in Anglo and so were now carrying a loss of €1.9 million.

Credit Unions are likely to see big losses with the new regime surrounding personal insolvency agreements set to take effect in the second half of this year. As banks have security on mortgage assets, Credit Unions will have to queue behind them for the crumbs.

As unsecured lenders, the credit unions face losing everything if a borrower goes the bankruptcy route, as do the banks. According to the Central Bank, total unsecured lending in Ireland amounts to about €15 billion. Of this, credit unions account for about €5 billion of the loans and the banks for most of the balance.

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