Debt Collectors

In Ireland, the Sheriff Is the Repo Man


Where there's debt, there are debtors—and creditors. In Ireland there are also sheriffs. The Irish central bank says the economy will expand slightly this year after its worst recession in 89 years of independence. At the same time, the mountain of debt accumulated in what was once the euro region's most dynamic economy will take far longer to work through. The latest figure puts household debt at $182 billion, a staggering number for a country of 4.5 million people. Lending more than tripled in the decade through 2007, according to Goodbody Stockbrokers in Dublin.

Many Irish, buoyed by real estate wealth that has since evaporated, bought luxury cars, country estates, and other symbols of the good life. If they can't pay their debts, their cars and other goods are legitimate targets for Ireland's 16 sheriffs, self-employed agents appointed by the Justice Ministry to collect on unpaid taxes and delinquent loans.

Business is good. "We're getting orders worth millions," says John Fitzpatrick, a Dublin sheriff who has confiscated Jaguars, Range Rovers, and Mercedes from indebted businessmen. "Those people are owned body and soul by the banks," he says. In the High Court in Dublin, debt recovery claims rose 48 percent, to 5,653 cases in 2009, according to the Courts Service. Sheriffs chased down $922 million in unpaid taxes last year, up 3 percent.

Sheriffs are responsible for selling off the goods they seize, then paying the government or the banks. In an arrangement known as "poundage," the sheriffs are paid a percentage of the funds raised. Ricky Wilson at Wilsons Auctions outside Dublin says the amount of assets he has sold for sheriffs has increased by as much as 15 percent in 2010.

The Irish system predates the 12th century, according to Jim Stafford, who advises companies on what to do when the sheriff comes knocking. "When money was really tight, they literally used to take blankets off beds," says Stafford. "They don't do that anymore." Cars, he explains, are the preferred asset. "They love motor vehicles because they can be driven away," he says. "They don't like dealing with cattle." (Livestock are still very valuable in Ireland.)

They do have to deal with plenty of pain, though. "One home I visited was an absolute palace," says Fitzpatrick, a sheriff since 1979. "The guy was reduced to bankruptcy. He was emotional. I don't think he had anything left."

The bottom line: Ireland is wading through billions in delinquent loans. Sheriffs help track down money to pay off the banks and the tax authorities.

Fahy is a reporter for Bloomberg News.

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