What are your options if you owe a debt?

If you have debt you have not repaid, what happens can depend on the type of debt it is.

For some types, particular rules apply, such as 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 what is due. 

The main ways it does so 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 it in instalments. Interest is charged on the amount you owe.

If you are paying income tax through Pay As You Earn (PAYE) and underpay in a particular year, you may be able to repay what is 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 do not respond, Revenue can refer your case to a Sheriff to enforce the debt. A court order is not required. 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 six months, the certificate must be returned to Revenue. The Sheriff has the authority to negotiate a payment arrangement, with you, which must be for two years or less. Once your case has gone to the Sheriff, you must 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. They will look for a court judgement that the amount is due, and 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, it has powers of attachment of debt. This means if you are owed money, Revenue can require 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 a bank or credit union account. It does not require a court order.

Property taxes

If you are responsible for paying Local Property Tax (LPT), and do not make a return, you will owe the amount estimated by Revenue. If you do not pay the tax, it 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, a charge will be put on your property, meaning you will not be able to sell it without paying the tax and any interest or penalties due.

Social welfare overpayments

If you get money from the Department of Social Protection you should not have, you must repay it, whether the overpayment was due to a mistake by you or the Department, or fraud.

Maintenance

We 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. 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, the local authority may start a process to evict you. It must warn you before it starts the process. If you have a loan from a local authority and are having difficulty making 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 - check on their website. If you are having difficulty paying your utility bills, it is important to contact the supplier as soon as possible. They may agree to a budget plan, spread payments across the year or install a pre-paid meter.

TV licences

You must pay your TV licence to An Post, which keeps a database of every premises that should have one. 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 pay. 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 two notifications. You then have 21 days to buy your TV licence and pay the fixed penalty fee. The penalty fee is capped at a 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 four months old, you must have a dog licence. Otherwise, you could face an ‘on-the-spot’ fine. If you do not pay this you can be prosecuted. If convicted, you could be fined up to €2,500 or up to three 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 you do not comply with a Community Service Order, you could be sent to prison.