No surprise many business people opt to break for the border
Published 11/01/2012 | 05:00
DEVELOPER Ray Grehan has done it, as has Cork property magnate John Fleming.
And now former government minister Ivan Yates is also deciding whether he too should join the flight of the Irish bankruptcy earls to the United Kingdom.
It is impossible to overlook the key differences between the Irish and UK bankruptcy regimes.
And the Belfast judge who denied Sean Quinn his bankruptcy in Northern Ireland said so yesterday.
Since 2005, bankrupts in Northern Ireland enjoy the same rights as bankrupts in England and Wales. That means a fresh start and back to business within 12 months.
This compares to the Dickensian 12-year period it takes before bankrupts are discharged in the Republic of Ireland.
The Government recently changed the laws to allow bankrupts to emerge from their debtors' prison within five years -- but only if they pay all their debts to the taxman first.
For most bankrupts here this means a 12-year "life term" -- one of the reasons why creditors are reluctant to push this nuclear button.
Wherever you file for bankruptcy, the sanctions can be extreme.
This is particularly the case in Ireland, where you cannot borrow more than €630, and can have all of your assets taken over by a court official.
You are also legally barred from acting as a director of a company and "earning" your way back to a fresh start.
You are also barred from serving as a TD or senator, as Fianna Fail stalwart Beverley Flynn discovered some years ago.
Officials in the Republic, in line with the UK, also have powers to investigate transactions in the years leading up to bankruptcy.
These can be set aside if they are deemed a fraud on the creditors.
Bankruptcy is an unpleasant experience wherever you find it.
But given Ireland's strict regime, it is no surprise that so many are breaking for the borders.