Court has power to probe accounts as far back as 2005
Published 23/09/2010 | 05:00
THE court official charged with carving up the estate of former banker Sean FitzPatrick has powers to investigate his accounts as far back as 2005.
The officer of the High Court -- known as the official assignee -- also has the power to cancel any transactions, including property transfers, between two and five years before July 2010, when Mr FitzPatrick was declared bankrupt.
Chris Lehane, the official assignee in bankruptcy, has jurisdiction to set aside any transaction agreed during this time -- but only if he can prove that Mr FitzPatrick was not in a position to meet his debts as they fell due.
His role is broad in terms of his powers, yet it is ultimately limited in scope. The job is to recover as much as he can.
Ireland has one of the harshest and costliest bankruptcy regimes in Europe. As a result, it is rarely used by creditors or debtors, who can be bankrupted for debts as low as €1,900.
Anyone who is made bankrupt stays bankrupt for 12 years (even after death), unless they are discharged by the court.
The courts will only consider allowing an individual to leave bankruptcy after enough money has been raised through the sale of their assets to cover the costs and certain priority debts, such as revenue debt, that have arisen in the bankruptcy process.
Once a person has been declared bankrupt, the official assignee will sell or otherwise dispose of property and assets, then distribute the proceeds to the creditors.
Other consequences include:
- All assets and property, including the family home, are taken control of by the official assignee for the creditors.
- The family home can be lost if the official assignee obtains ermission to do so from the High Court.
- A debtor's salary and pension can be taken over.
- Proceedings in Ireland are recognised in most other EU member states. Property owned abroad by a bankrupt can be taken into account by the official assignee.
- A bankrupt cannot act as a company director, auditor, manager, liquidator or receiver.
- They must inform the official assignee if they plan to travel outside of Ireland and can be arrested if the High Court believes they are leaving the country to avoid the consequences of bankruptcy.
- A bankrupt cannot hold elected or representative office in local authorities, the Dail or Seanad.
Under new laws planned by the Government to ease Ireland's draconian bankruptcy regime, bankrupts will be allowed to apply to be discharged from bankruptcy after six years, rather than the current 12.