'You forfeit it all and become an economic zombie'
Ivan Yates talks to Donal O'Donovan as he prepares to join the Irish Independent as a regular columnist next Thursday. Photo: Frank McGrath
IVAN Yates is keen not to get into the personal side of his high profile bankruptcy – the drinking, the loneliness and even despair he experienced during the 14 months he spent as in Swansea, 12 of them as a declared bankrupt.
"Look, I really want to talk about this in the third person as much as I can, to talk about what its like for anyone going through the bankruptcy process, not what it is like for Ivan Yates," he says.
The idea is to present the facts of his case as a lesson for anyone out there who might be in the kind of position he was in himself, before he took the decision to go to the UK.
That's the idea, as the discussion gets going, the personal impact of the bankruptcy odyssey bubbles up, his shock at having being asked to read the UK's Perjury Act out loud to officials in Swansea remain obviously raw a year after it happened, for example.
For anyone who needs reminding, Mr Yates became the country's most high-profile bankruptcy tourist after the collapse of his bookmakers business in 2011.
Along with his wife Deirdre he had provided the bank with personal guarantees for loans taken out by the business. When it failed their personal finances went with it.
It is our first meeting in more than a year, since the day Mr Yates put his former business empire into liquidation back in March last year. At the time he had called the liquidation "another staging post in a pretty miserable journey," he reminds me.
The journey is not over yet.
He won't know for another month whether AIB is to get a share of his new income for the coming two years, for example.
So Ivan Yates is out of bankruptcy, with his debt slate wiped clean, but the bankruptcy process goes on, he explains.
"When you come out the other side there are still two issues hanging over you, a bankruptcy restriction order and a bankruptcy restriction undertaking."
This is Ivan Yates, the one time Minister for Agriculture and businessman talking, well researched and fluent on his brief.
He rattles off the names of the forms that must be filled out in triplicate, the fact a bankrupt person can have a car but if they sell it can't keep the cash, the peculiarity that lets a bankrupt claim tax back.
At the end of any bankruptcy the former debtor is hit with two things – a bankruptcy restriction order (BRO), rules about what they cannot do, and more importantly a bankruptcy restriction undertaking (BRU).
The BRO means Mr Yates cannot stand for election in the UK – he's fine to run here; must inform lenders of his bankruptcy before trying to borrow, ditto if he wants to become a company director.
More pressing is the bankruptcy restriction undertaking (BRU), which can involve what is called an income payments order.
The order allows the trustee nominated by AIB to take charge of Ivan Yates' finances during the formal bankruptcy to keep dipping his hand fairly deep into Mr Yates' pocket for the next two years.
It is not a standardised thing, but the dark mood from AIB and Mr Yates' now considerable post-bankruptcy income suggests it is likely.
The rules are fairly clear, for up to two years after a bankruptcy the bank – acting through a trustee – can recoup any income in excess of what's considered necessary for a minimum standard of living.
In Ivan Yates' case that will amount to a hefty figure. He has his old job back as a presenter with Newstalk and has just been hired as a columnist with this newspaper.
It's still worth it, he reckons.
"There's no silver bullet here. The idea of the year is a big thing, it means you can see light at the end of the tunnel but actually once you get into it it's a three year thing,"
So would he recommend the move to others?
"Would I advise someone to go to the UK? I'd press the pause button," he tells me.
"They offer you a simple deal. You forfeit nearly everything, you become an economic zombie for a year, but then you emerge debt free."
It's certainly not a free ride, he says.
"For one thing the family home is absolutely not protected. You are given one year to find alternative accommodation and that is it."
That is slightly complicated in his own case because his mother has a legal right to live on the property, but ultimately there is no doubt the house and farm will be sold and the money will go to the bank.
So it's harsh but Mr Yates is evangelical about one aspect of the UK system.
"The credo is that they want to rehabilitate you as an economic actor."
The contrast is with Ireland and the heavy emphasis here on punishing the borrower for past wrongs.
So his view is the UK system is there and anyone sinking under debts can use it, but they should tread carefully.
"It will work best for you if absolutely everything you have is in negative equity, dragged down by debt," he said.
"And if you are young, and especially if you can get work in the UK to finance yourself while you are there," he says.
In his own case a state-financed TDs pension was crucial in financing his own relocation.
"No two cases are the same, even if they are the same from an assets and debts position, the human story is different," he says.
"You will never know in advance how the dislocation will impact on you. People should not be blasé.
For older people – those in their 60s or over – I think it could destroy their lives," he says bluntly.
Anyone who is looking at going is looking at a minimum of 18 months abroad, and a stressful and invasive bankruptcy on top of it. If you do go its important to be organised, he says.
Now we're back to Mr Yates the old stager, plotting and executing.
The legal definition is; you must be living in the UK for the majority of a six month period to be eligible for bankruptcy as a UK resident.
Mr Yates took no chances, he moved over entirely, rarely coming home over the 14 months he was in Swansea.
To prove normal residence he needed a property lease of at least a year, utility bills, tax residence, an NHS card, to register to vote.
Crucially you have to tell your creditors where you are.
"It's not about running away from your debts, you have to be upfront."
If you don't the likelihood, especially if you are a big borrower, is that your creditors will object and block the UK bankruptcy.
Once you get there you become part of the conveyor belt of the broke processed through the UK system each year, but he admits its still a deeply personal situation.
In Mr Yates case, officials he dealt with were keen to stress the process is not about criminalising the bankrupt, but it was something they felt the need to say.
"Hard not to feel that way when you are told to read aloud the Perjury Act 1926" he points out. "It felt like a criminal process," he says now.
That is not surprising when so much of the process is about trying to unearth wrongdoing.
Among the sworn statements he had to sign, along with all bankrupts, was a statement of affairs going back over five years. Any mistakes, or worse misleading statements in that can spell disaster in terms of actually coming out of the bankruptcy.
At any time over the following year you can be hauled in and questioned about the details.
The process is difficult and bureaucratic and Mr Yates' own view is its not something he could have managed without professional help.
On the plus side it's not just about wiping out debt.
"It can be a matter of escaping negativity and stigma at home," he reckons.
Negativity, including a growing tide of anti-business sentiment is now a bugbear for him.
He reckons it is acting as a drag on recovery, along with the bigger issue of the failure by banks and politicians to face up to the issue of unpayable debts.
His own return from the UK has been met by an unexpected public backlash. He's not the only one on the receiving end, he reckons.
"I'm disappointed that people who are not in that situation aren't cutting a bit more slack".
He sees an unpleasant "smugness" among his own generation, an unwillingness to admit some homebuyers were just in the wrong place at the wrong time, or accept how many business owners have been "flattened" by the economic collapse.
His own view is that banks are manipulating public opinion by stressing the potential cost to the "Mr and Mrs taxpayer" of debt settlement or debt.
Having been through the wringer himself he has no intention of shutting up about any of this.
"I do intend to try to lift the mentality, and say 'Ok shit happened but we have to create a better future'."