British bankruptcy specialists see Irish clients treble despite new law
RECENTLY announced changes to the country's bankruptcy law will not stem the flood of Irish bankruptcy tourists to the UK, says a leading Leicester-based bankruptcy consultant who claims that his Irish client list has more than trebled from around 30 to just under 100 in the last four months.
Solicitor Steve Thatcher, a bankruptcy specialist who has been processing Irish cases in the UK since last year, has blamed what he calls the "five-year-bite-your-bum" clause in the Personal Insolvency Bill that proposes to allow banks to reapply through the courts for five years of "additional payments" after the initial three-year bankruptcy term expires.
He says that this effectively turns a three-year bankruptcy into an eight-year term.
"The big problem is this five-year clause. Once you put in your three years as the new legislation demands, then official assignees, usually the receivers, can go to court and ask for five more years of additional repayments.
"In reality that's a possible eight-year bankruptcy -- and because it might take another year for the new legislation to come into being, that's nine years and by that time, many won't be able to get their life back in order."
Mr Thatcher says most creditors will avail of the five-year option.
"In my mind, no bank which is offered a chance to apply for five years' additional payments is going to turn that chance down and this clause would not be included in the legislation were it not enforceable by the courts.
"Now it may be the case that the cost of going to court might put some banks off, but the fact is that those Irish business people who want to go bankrupt will regard it as a possible five more years spent with their lives on hold."
The solicitor says his Irish client list has trebled since March -- a factor which may indicate that a rump of Irish business people have now resumed their plan to declare bankruptcy in Britain having initially postponed the decision to see what the new legislation might offer them.
In addition, Mr Thatcher says British declarations are further encouraged by the €3m ceiling which the Personal Insolvency Bill proposes.
"There are thousands who owe more than €3m. Consider that it doesn't take a lot of Irish properties at boom-era prices to amount to three million euro.
"We're being very fair with those Irish clients who contact us. We're outlining how their cases will run under Irish law and comparing it to the outcome entailed by declaring in Britain.
"I think the end result is that we're going to see a further surge of those declaring both in Northern Ireland and in Wales during next summer."
Mr Thatcher, who has worked with Irish Bankruptcy UK until recently, is in the process of setting up Debt Options, a new UK-based consultancy with an office in Ireland.