MORE than 1,000 people have already begun the process of being declared bankrupt -- just seven days into the new bankruptcy regime, the Sunday Independent has learned
It means that fears of a flood of bankruptcies, dismissed out of hand by the Government when the legislation was going through the Dail, is now a reality.
Advocacy group New Beginning has already been inundated with more than 1,000 distressed borrowers who now see personal bankruptcy as the only option.
And PIPs (Personal Insolvency Practitioners) all over the country have also been flooded with enquiries.
Under the new laws, people can exit bankruptcy after just three years, compared with the "life sentence" of 12 years under the old legislation.
The old laws meant that those who lost their millions in the crash went to the UK and Northern Ireland to avail of the less arduous British insolvency legislation.
But the hundreds of people now seeking bankruptcy to rid themselves of crushing debt are mostly ordinary people whose small businesses were wiped out or who lost their shirts in disastrous buy-to-let property investments.
Others simply fell on hard times after losing their jobs and have been financially crushed by huge mortgage repayments on family homes deep in negative equity.
The first seven bankruptcies under the new laws were adjudicated in the High Court last week. Four people were declared bankrupt following their own application. Three more were made bankrupt by a creditor on Monday before Mr Justice Brian McGovern.
Now there are fears that the High Court, which heard just 40 bankruptcy cases last year, will not be able to cope with the huge surge in applications.
New Beginning believes the circuit court should now be allowed to hear applications, just like in the UK.
Barrister Ross Maguire said a common thread was emerging of people who have spent the last five years trying to get themselves out of trouble and are now at rock bottom.
He told the Sunday Independent: "We are seeing many small and maybe medium-sized business people who have failed as a result of the collapse in the economy. Since they started to fail in 2008 they have thrown everything they have at the businesses to try and keep them going and now they are all out.
"They have nothing left. They have spent four, five and six years fighting this fight and they now realise this is a waste of time. And they have these huge debts, both secured and unsecured debts."
Mr Maguire said New Beginning advisers had been shocked at the levels of personal debt they were witnessing.
"The thing they have in common is that they have nothing and they have mind-boggling debt. When we tell them that in three weeks to six weeks we can make them debt-free the impact on people is remarkable. You can see that weight lifted off their shoulders. It is remarkable," Mr Maguire said.
Justice Minister Alan Shatter had predicted that about 3,000 people would apply for bankruptcy. But Mr Maguire said it was likely the figure would be closer to 10,000.