From 10 October 2011 new rules apply for personal bankruptcy. Among the new provisions, which have been widely reported on in the media, is the significant reduction of the application period for the discharge of bankrupts from twelve years to five years and for the automatic discharge of bankrupts on the twelfth anniversary of the adjudication order.
The provision for discharge after five years remains subject to the same conditions for discharge that exist at present. These include the requirement that the bankrupt make an application to court and show that preferential creditors and certain costs and expenses of the Official Assignee have been paid.
It is reported that there are over 360 persons in Ireland who were adjudicated bankrupt more than twelve years ago. These persons will be eligible for ‘automatic’ discharge under the new provisions. Previously such persons remained bankrupt, potentially indefinitely, until such time as they could meet the conditions of discharge under the existing legislation.
Whilst the new provisions are generally regarded as a positive step, they do not go far enough so as to bring Ireland’s notoriously draconian bankruptcy legislation in line with that of other EU member states. In this regard, Minister Alan Shatter is on record as stating that there is still considerable reform required but that he regards the new provisions as an important first stage in the modernisation of our personal insolvency regime.
The Government has made a commitment to further reform the personal bankruptcy legislation as part of the EU/IMF agreement. Such further reforms are expected in or around 2012.
Contributed by Craig Sowman.
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