During 2011 amendments to Bankruptcy legislation were introduced.  The main amendments to the Bankruptcy Act 1988 were:

1. The introduction of an automatic discharge of bankrupts on the 12th anniversary of the adjudication order. 
2. The reduction of the period, from 12 years to 5 years, within which a bankrupt may apply to court for discharge from bankruptcy. Therefore, if 5 years after the date of adjudication a bankrupt person is able to pay the expenses, fees and costs of the bankruptcy and the preferential creditors in full, they could be discharged from bankruptcy and freed from all other bankruptcy debts and from all the restrictions that apply to bankrupt persons. The Court must also be satisfied that the estate of the bankrupt has been fully realised, that all after-acquired property has been disclosed and that it is reasonable and proper to grant the application.
3. The relevant time periods for reviewing transactions have been extended, as follows:
   • Fraudulent preference –  extended from six months to one year;
   • Disposition of property at an undervalue – extended from three months to one year.
4. A creditor can now present a petition against a debtor if the debtor has ordinarily resided or had a dwelling-house or place of business in the State within 3 years before the date of presentation of the petition. This has been extended from 1 year.

Conclusion

The reforms have introduced an automatic discharge after 12 years and an ability to apply for discharge after 5 years, however, bankruptcy is still a lengthy process in Ireland when compared with England and Northern Ireland where a discharge can be obtained after one year. More extensive reforms are expected in a Personal Insolvency Bill due to be published in 2012.

Any questions concerning the information contained in this document should be addressed to Fergus Doorly.