State bankruptcy term reduced from 12 years to three

Legislation changes to the State’s bankruptcy term, reducing it from 12 years to three, were announced this week by Minister for Justice, Alan Shatter.
 
During his announcement, the Minister said this new package of measures will "complete the reform of our personal insolvency and bankruptcy legislation" and "address the circumstances of insolvent debtors".
 
Mr Shatter said: "Critically, there will now be automatic discharge from bankruptcy after three years from the date of adjudication – a significant reduction from the current 12 years.
 
"Bankruptcies currently existing for three years or more at today’s date will be automatically discharged after a further six months have elapsed."
 
There are currently 189 people who have been adjudicated bankrupt by the court. Of these, 73 have been in bankruptcy for three years or more and will now be eligible for automatic discharge six months from now.
 
Christopher Lehane, Official Assignee in Bankruptcy, believes the enactment of the legislation means there is now "a viable bankruptcy solution for debtors in financial difficulty".
 
"With the bankruptcy period now reduced to three years, debtors are more likely to engage with a process which shields them from creditors and leaves them debt-free after three years," he added.
 
Meanwhile, Lorcan O’Connor, director for the Insolvency Service of Ireland (ISI) agrees the legislation is "good news for people who are struggling with personal debt".
 
"We now have a full suite of debt solutions available to people who are insolvent that will ensure they can return to solvency in a fair, transparent and equitable way," he said.

"Having the bankruptcy process become part of the ISI makes it easier for debtors as there is now a single point of contact for anyone dealing with over-indebtedness.

"It enables the ISI to administer all debt solutions from one place, improving efficiencies and streamlining the process."
 
Other elements of the act have already been introduced, such as alternative insolvency arrangements including debt relief notices.

Date published 6 Dec 2013 | Last updated 6 Dec 2013