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Why Irish councils are using private collectors to crack down on unpaid debt

Irish councils are increasingly being forced to confront the reality of their debt situation head on. Local authorities have spent far too long stuck in no-man's land when it comes to unpaid debt.Money Background

A sticky situation

According to the Irish Independent, approximately €320 million of unrecovered debt lies in development levies. Councils are in a tricky position, as construction companies must be allowed the chance to grow and repay their debt rather than being forced into insolvency – an approach that would bring a storm of negative publicity. The situation is arguably even more difficult when people's homes are at stake.

It's therefore unsurprising that some slack is granted and that strong-arm debt collection methods are avoided in this middle ground. What is surprising is that there are numerous cases in which debtors' building sites aren't being inspected. Councils are guilty of neglecting the debt, leaving many companies to ignore it, expecting that councils, unlike private creditors and central government, won't take action to reclaim the funds.

Recovering funds fairly

The middle ground might seem problematic, but with patience and foresight solutions come to the fore; Irish councils are now finding this, to their credit. They are increasingly engaging with private collectors to assess debt, and decide what to write off and what to pursue, which is a sensible starting point. It arrests the build-up of debt and begins the processing of fixing balance sheets, taking steps towards the recovery of funds.

Here at Dukes Bailiffs we believe that the key to successful debt collection is reminding people of their responsibility to pay their debts, and finding a fair and effective way for them to do so. English councils could benefit from a similar stance to that of Irish authorities. Recent figures from the Audit Commission show that £4.55 billion of council tax and business rates alone remained uncollected at the end of March 2014: that's the cost of building 300 secondary schools.

Deploying a firm but fair approach is the only way to ensure that those who can pay, do, and that those who can't have somebody to speak to. For more information about how Dukes Bailiffs can help, visit our Contact Us page.

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