Legislation to reduce the bankruptcy term from three years to one year will be in place by the end of the year, Taoiseach Enda Kenny has said. Mr Kenny told the Dáil the Government has accepted the need to reduce the term from the recently introduced three years to one year. The move had been championed by Labour Longford-Westmeath TD Willie Penrose, and was backed by the Labour parliamentary party. However, it was opposed by the Department of Finance and did not feature in the Government’s mortgage arrears package earlier this year.
Mr Penrose said: “This is critical. The current situation where it is three years’ bankruptcy here and one year north of the Border is rather silly and impractical. This is something the Labour Party has supported and called for and I am pleased to see it will now happen.” When adopted, this would bring Irish bankruptcy law into line with laws in the UK.
John Lowe the Money Doctor welcomed the move. “Too many borrowers are stuck in a rut. Hopelessly insolvent – unable to pay their debts as they fall due – and invariably owe more than the property is worth. Mortgages with greater than two years’ arrears are on the increase and going nowhere. For those looking for a fresh start, the timing could not be better.”
Bankruptcy comes from two Latin words… bancus meaning bench on which bankers used to ply their trade in the markets and ruptus meaning broken. When the bankers ran out of money, could nt repay their creditors, to signify they were out of business and bust, they broke their benches.