Dec 3, 2013 – The Insolvency Service of Ireland (ISI) welcomes the new bankruptcy legislation.

The Insolvency Service of Ireland (ISI) welcomes the new bankruptcy legislation which took effect today. The commencement of this legislation, announced today by Minister for Justice, Equality and Defence, Alan Shatter TD, completes the suite of solutions to restore insolvent people to solvency.

Key features of this legislation include:

  • A reduction in the length of bankruptcy from 12 years to 3 years;
  • The transfer of the Office of the Official Assignee in Bankruptcy from the Courts Service to the ISI;
  • The requirement for debtors to show they have made reasonable efforts to avail of a Debt Settlement Arrangement or a Personal Insolvency Arrangement in order to be eligible for bankruptcy.

“This is good news for people who are struggling with personal debt,” said Lorcan O’Connor, ISI Director. “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.”

“Having the bankruptcy process become part of the Insolvency Service makes it easier for debtors as there is now a single point of contact for anyone dealing with over-indebtedness,” said Mr. O’Connor. “It enables the ISI to administer all debt solutions from one place, improving efficiencies and streamlining the process.”

The Office of the Official Assignee in Bankruptcy, which is now based in the ISI, welcomed today’s commencement measures, which bring Ireland into line with international best practice.

“We now have a viable bankruptcy solution for debtors in financial difficulty,” said Mr. Christopher Lehane, Official Assignee in Bankruptcy. “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. I am satisfied that there are adequate safeguards in the reform measures that only those who cannot pay can avail of bankruptcy.”

“We have increased our bankruptcy staff numbers four-fold, recruited experts from the insolvency sector, and are acquiring a specialist insolvency IT system to assist us manage a high volume of cases. We expect a significant rise in bankruptcies, particularly by debtors who make up 85 per cent of applicants in the UK,” said Mr. Lehane.

Further to this, the ISI welcomes the news published last week that the costs of bankruptcy are set to be almost halved according to proposed legislation. The Companies (Miscellaneous Provisions) Bill 2013, when enacted, will reduce the costs from approximately €1,350 to €800 by removing the current requirement of a person to pay for an advert regarding their own bankruptcy in a national newspaper. Under the proposed legislation, information regarding a person’s bankruptcy can be published on the ISI’s website, at no cost. Notification of the bankruptcy must still be placed in Iris Oifigiúil (the State gazette).

To help people understand all the options available to them, a leaflet covering the full suite of ISI debt solutions (Debt Relief Notice, Debt Settlement Arrangement, Personal Insolvency Arrangement and Bankruptcy) has been circulated to public libraries, Citizens Information Centres and MABS offices around the country. It is also available on the ISI website (https://www.isi.gov.ie/), together with  ‘A Debtor’s Guide to Bankruptcy ’and new bankruptcy scenarios.

Source: Gov.ie