How To Declare bankruptcy in Ireland With The New Legislation
Bankruptcy in Ireland has been changed, changed utterly; although a not-so-terrible beauty has been born for debtors.
It’s almost one hundred years since WB Yeats scribbled his famous lines on how Ireland had “changed utterly” after Easter 1916 but our out-dated bankruptcy laws had been around for much longer than that.
It’s about time they’ve been changed and changed utterly at that. In fact the changes will represent something of a financial revolution for those burdened by unsustainable debt.
The most striking beauty of the new-look Bankruptcy Act is that it allows individuals declaring bankruptcy in Ireland to free themselves from the stress of their financial mess within just 12 months.
No more will people be forced to endure too long a sacrifice in bankruptcy. In 2012 the draconian 12 year Irish bankruptcy period was slashed to a still-harsh three year term. However, as of January 29, 2016, all applicants for bankruptcy can avail of a much less restrictive one year term.
It’s been 149 years in the making (the Irish Bankruptcy and Insolvency Act was introduced in 1857) but it’s finally arrived to offer a realistic alternative to coping with insolvency.
Since the provisions were enshrined in law recently more and more people have presented with debt which has been crippling them for many years. These are honest, hard-working citizens who have laboured for too long and have now been finally given a chance to shake off the insolvency shackles within a reasonable bankruptcy time frame.
However, the reduction from three years to one of the normal maximum bankruptcy period is not the only notable change to the bankruptcy process in Ireland.
Here’s is a step by step walk through what the new bankruptcy changes are and what they mean for those declaring bankruptcy in Ireland. The provisions of the Bankruptcy (amendment) Act 2015 took effect on January 29, 2016.
Provisions of the Bankruptcy (amendment) Act 2015
- Bankruptcy term reduced from three years to one year.
- Income payment period reduced from five years to three years.
- Re-vesting of family homes in debtors within three years of an individual’s bankruptcy adjudication but only in cases where the official assignee has not taken steps to sell the property.
- The official assignee has been given wider powers to disclaim assets in bankruptcy estates which have no value to the estate, yet may involve a burden on the estate.
- The discharge period of bankruptcies can be extended by periods of up to 8 and 15 years by the court where it finds there has been non co-operation with and/or non-disclosure of assets to the official assignee.
- The Act envisages the abolition of the current requirement for a second court sitting which persons declared bankrupt must attend. It is understood that this provision requires court rule amendments in order to commence. The Insolvency Service of Ireland says it believes that this provision will be finalised in the near future.
How pre-existing bankruptcies are affected
Anyone declared bankrupt prior to January 29, 2016 can avail of the new provisions. The new legislation allows for transitory provisions dealing with early discharge for individuals, the termination of existing income payment orders and re-vesting of family homes.
Individuals adjudged bankrupt on or before July 29, 2013 will be discharged on their original three year discharge date.
Individuals adjudged bankrupt between July 30, 2013 and July 29, 2015 will be discharged on July 29, 2016.
Individuals adjudged bankrupt on or after July 30, 2015 will be discharged one year after their adjudication.
How existing income payment orders are affected
Income payment orders will terminate on the original expiry date for those adjudged bankrupt on or before July 29, 2016.
Income payment orders will terminate no later than three years after adjudication for individuals adjudged bankrupt on or after July 30, 2016.
Income payment orders may be ordered to terminate at an earlier date. An income payment order can be made for up to 5 years by order of the court in cases where non-disclosure or non-co-operation is found.
How the re-vesting of family homes is affected
Where the official assignee does not take steps in the sale of a family home within three years of adjudication it may re-vest in the bankrupt individual.
In such cases the following dates will apply for re-vesting of family homes.
Re-vesting of family homes for an individual adjudged bankrupt on or before July 29, 2013 may take place from July 29, 2016.
Re-vesting of family homes for an individual adjudged bankrupt on or after July 30, 2013 may take place three years from adjudication.
Automatic re-vesting will not take place where:
a) The official assignee and the bankrupt agree in writing that the property does not re-vest.
b) The court orders that the property does not re-vest.
c) The court extends the three year period
If you are looking for help or advice on making an application for bankruptcy, call us today on 01 5313494 or fill in our contact form for a no cost phone assessment.