Bankruptcy applications in North by debtors from the Republic soar
THERE has been a surge in bankruptcy applications in Northern Ireland by debtors from the Republic trying to flee an onerous 12-year business ban.
The Irish Independent has learned 18 debtors have filed this year for bankruptcy in the North where bust borrowers can emerge from bankruptcy within a year compared to up to 12 years here.
The cross-border surge includes bankrupt businessman Sean Quinn, who has been ordered by the Commercial Court in Dublin to pay more than €2bn to the Irish Bank Resolution Corporation (formerly Anglo Irish Bank).
Mr Quinn says he is entitled to file for bankruptcy in Belfast because his main centre of interest (COMI) -- a requirement under EU insolvency laws -- is in Derrylin, Co Fermanagh, where Mr Quinn was raised, attends Mass and has bought a burial plot. Derrylin is where the Quinn Group was headquartered before it was placed into receivership by the IBRC last April and where Mr Quinn says he is working on "embryonic" plans to get back into business.
There were 29 bankruptcies granted in the Irish High Court in Ireland in 2010 (the latest figures available) compared to just eight in 2008.
But this year alone, 18 debtors have crossed the Border to file for bankruptcy in the North, which is experiencing record numbers of bankruptcies and Individual Voluntary Arrangements (IVAs), where people agree long-term repayment of their debts.
Last night, the Department of Enterprise Trade and Investment (DETI), which funds the Northern Ireland Insolvency Service, said that it was not aware of any significant number of cross-border insolvencies before this year.
And it said that the recent influx was placing "additional pressure" on the available resources of the NI insolvency office.
The department confirmed the strain on resources after lawyers for the official receiver managing Mr Quinn's bankruptcy told the High Court in Belfast that a number of bankruptcies that had been filed in the North by debtors from the Republic may be more suitable for administration here.
Earlier this year, the Government changed Ireland's archaic bankruptcy regime to allow bankrupts to emerge from bankruptcy after five years, but only if they had paid preferential creditors -- such as the Revenue -- and paid all the expenses, fees and costs of the bankruptcy.
Justice Minister Alan Shatter said that he would introduce further reforms of personal insolvency law early in 2012 in line with the commitments made as part of the EU-IMF agreement.