800 people are released from bankruptcy due to new law
Published 29/07/2016 | 02:30
Hundreds of people are set to be released from bankruptcy today.
The end of bankruptcy for almost 800 people comes after changes to the law that reduced the bankruptcy period from three years to one year. That change came in at the start of year.
Those being released from bankruptcy today had already been in the system and had expected to be financially restricted for three years. Among them is businesswoman Jillian Godsil, who was declared bankrupt in February 2014.
Head of the Insolvency Service Lorcan O'Connor said the law giving effect to the shorter bankruptcy period had allowed for a transitional provision for those already in the system.
This was to ensure they did not lose out when the one-year bankruptcy period came in last January, he said.
Mr O'Connor said: "793 individuals will be automatically discharged from bankruptcy today. The new one-year term applies to anyone made bankrupt since July 29, 2015.
"For those made bankrupt prior to this date, transitional provisions applied, resulting in the large number of automatic discharges today."
Bankrupts have to hand over a portion of any income, while their bank accounts are frozen, except for one current account in which you can keep a balance of up to €1,000 for general living expenses. However, as soon as the bankruptcy starts, they are free from their debts.
The Insolvency Service has recorded a 29pc rise in applications for debt settlement deals, including bankruptcy, in the second three months of this year compared with the January to March period.
Almost 5,000 people applied to be declared bankrupt or to have a deal put in place to reduce their debt and pay back less than originally agreed.
Mr O'Connor said 3,500 people had now returned to solvency by getting debt deals overseen by the agency. He welcomed a new scheme for borrowers in mortgage arrears, which provides free access to a personal insolvency practitioner and other professional advice.