Tuesday 24 September 2019

Bankruptcy cases hit record levels after 760pc surge

A record number of people were adjudicated bankrupt last year. Stock picture
A record number of people were adjudicated bankrupt last year. Stock picture

Shane Phelan and Tim Healy

A record number of people were adjudicated bankrupt last year, new figures reveal.

Some 499 people were declared bankrupt in 2015 - a 760pc rise on just two years previously.

The figures were contained in the Insolvency Service of Ireland (ISI) annual report, which was laid before the Oireachtas yesterday.

The Irish Mortgage Holders Organisation said it believed at least 80pc of the bankruptcy cases would have involved people with mortgage debt.

The ISI said the increase was likely due to record numbers of people in financial difficulty as a result of the recession reaching the point where they needed to come to a long-term solution.

Debtors petitioning for their own bankruptcy, rather than being forced into it by a financial institution, accounted for 93pc of total bankruptcies last year.

"The amended bankruptcy regime reduced the automatic discharge period from 12 years to three years and then to one year, subject to certain conditions. It has made bankruptcy a more viable option for people," an ISI spokesman told the Irish Independent. But he said debtors must first explore the other solutions prescribed in the Personal Insolvency Act before pursuing bankruptcy.

Solutions

The report said the ISI had helped 2,000 debtors to secure permanent debt solutions that returned them to solvency, up 70pc on 2014. Some 1,371 protective certificate were also issued last year, giving debtors protection against legal proceedings from creditors for 70 days while they seek to enter a personal insolvency or debt settlement arrangement.

The report said the cost of applying for a bankruptcy had been reduced to €270.

"Bankruptcy is a great relief for some people," said Irish Mortgage Holders Organisation director David Hall. However, he said the process could be made a lot easier for people who wished to avail of it. "It is an administrative process that is too prescriptive, too bureaucratic and too expensive," he added.

Meanwhile, a leading court official has queried whether Allied Irish Banks' largest shareholder, the Minister for Finance, is aware of the extent of its litigation in repossession and debt cases.

Master of the High Court Edmund Honohan, who deals with a range of administrative matters relating to cases on their way to trial, noted about half of the 98 cases before him on Tuesday were taken by AIB and asked whether the bank's "largest shareholder" was aware of this.

Most of the bank's cases related to substantial debts exceeding €75,000, while 11 concerned possession proceedings.

The same list included four debt collection cases brought by Bank of Ireland and two by Ulster Bank.

Irish Independent

Also in Business