bankruptcy 3

The term of bankruptcy could be reduced from three years to one if a new bill, initially introduced by Labour TD Willie Penrose, and now being sponsored by Justice Minister Frances Fitzgerald is passed by cabinet. Only since the Personal Insolvency Act came into law in 2012, the bankruptcy term had been 12 years and this act reduced it to 3 years.

It is widely expected that the bill, which will bring Irish bankruptcy laws in line with the United Kingdom, will be approved when it’s put to Cabinet this morning. Other proposals in the bill include increasing penalties for those who try to hide assets and for those already in the process, the timescale for bankruptcy will be 18 months.

In cases of serious non co-operation, the period will be extended to 15 years – the maximum at the moment is 8 years. In addition, the window in which income payment orders apply will be cut from five to three years.

These orders apply when bankrupt individuals are pursued for income surplus that is considered to be in excess of reasonable living costs. Speaking about the proposed bill this morning minister for Public Expenditure and Reform Minister Brendan Howlin said that it would help people recover from previous mistakes.

“Bankruptcy is not an easy option for anybody. It is the last option for somebody. The stigma of bankruptcy will still exist. The problems in relation to the court orders and paying back will continue for years after the bankruptcy. So it certainly won’t be an easy option for anyone. Anybody who is facing into bankruptcy will know how difficult and challenging it is for themselves and their family.”

It is currently unclear as to what will happen to those who are already bankrupt should the bill be passed however, it is understood that those who have been so for one year could be cleared after three months.

The proposal has been warmly welcomed by John Lowe, The Money Doctor, who sees it as another step in the process which will allow unfortunate individuals to regain control of their lives, get on with providing for their families and hopefully contribute to the recovering economy. It will also help the lenders settle far more quickly knowing the alternative is now a one year bunkruptcy route.

Pin It on Pinterest

Share This