Government fear Ireland will become 'bankruptcy destination'
Published 02/05/2015 | 02:30
PROPOSALS to slash the maximum bankruptcy term by a further two years appear dead in the water as fears grow within Government circles that such a move would attract "bankruptcy tourists" to Ireland.
Although the bankruptcy term is just one year in both Northern Ireland and the UK, opposition to the move within the Department of Finance has hardened significantly in recent days.
Sources say expert advice has pointed to the prospect of Ireland effectively becoming a haven for bankruptcy tourists from Europe who seek to travel here to avail of the personal insolvency rules.
A number of high profile Irish business people, including former Fine Gael minister Ivan Yates, made headlines following their decision to move to the UK to avail of the one-year term.
"We cannot have a situation whereby we become a destination for bankruptcy tourists," said a Government source.
Coupled with these fears is the feeling that the current three-year system has not been in place long enough to allow a proper judgement to be formed over its operation.
Several Labour ministers are now of the view that the plan from within their own party is unlikely to form part of the overall mortgage measures, due to be unveiled shortly.
Speaking to the Irish Independent, Public Expenditure Minister Brendan Howlin said he was in favour of reducing the term but was also open to other ideas.
"I support this because it is a mechanism that will on the face of it put pressure on financial institutions but there might be other solutions and other solutions are being looked at so lets see what set of measures together will achieve the objective. I am not prescriptive of the how, I am much more passionate about it happening," Mr Howlin said.
The news will come as a blow to Labour TD Willie Penrose and his backbench colleagues who previously described the cut in bankruptcy as a "red line" issue.