Friday 15 December 2017

Bankruptcy 'still a painful process' despite reforms

Charlie Weston Personal Finance Editor

OVER-indebted consumers considering declaring themselves bankrupt were warned that it is a painful and restrictive process.

Justice Minister Alan Shatter has signed an order reducing the bankruptcy term to three years from 12 at present.

The law, which is part of the Personal Insolvency Act, aims to make bankruptcy less punitive and costly.

The reduced time-frame is seen as an attempt to stop so-called bankruptcy tourism, which has seen Irish people moving to the UK to avail of its more lenient bankruptcy regime.

Up to 5,000 people are expected to either declare themselves or be forced into bankruptcy in the next year on foot of the reduced timeframe, up from 44 last year.

A number of organisations have been promoting the merits of bankruptcy.

But senior policy analyst at the Free Legal Advice Centres (FLAC) Paul Joyce warned that being made bankrupt will still be difficult and messy.

"It is a very trying process for people. It is not very pleasant to find yourself in this situation."

And he said people would need expert help.

"There is quite a lot of paperwork that has to be filled out in triplicate. It is not easy stuff to do."

Mr Joyce, a barrister, said those who go through the three-year process will have their name on a register of discharged bankrupts forever, which will have financial implications for people.

"Bankruptcy will still be a painful, messy affair," he said.

The cost of being declared bankrupt has been halved from a total of €1,400. This includes €650 fees for the official assignee, €100 stamp duty, but there is no longer a requirement to publish a notice in a newspaper, saving around €700.


On top of this it costs between €2,000 and €6,000 to have a solicitor process a bankruptcy application, but a number of bodies are preparing to do this work for free.

And the Insolvency Service, which includes the office of the State's bankruptcy official assignee, has launched a new guide to help people complete the process themselves.

There are information guides available on the official website of the Insolvency Service of Ireland –

Irish Independent

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