THE Government has brought forward legal changes that will allow people to apply for release from bankruptcy after five years.
Bankruptcy occurs where a person cannot pay all or part of their debts and their assets are distributed to the people to whom they owe money.
In Ireland, it currently lasts for 12 years, with those declared bankrupt facing travel restrictions, curbs on their ability to borrow money and/or run a business.
Yesterday Justice Minister Alan Shatter published details of the new Civil Law (Miscellaneous Provisions) Bill, which will also allow the Civil Legal Aid Board to give advice to victims of human trafficking.
The Bill will introduce an automatic discharge period from bankruptcy.
This fulfils a key commitment in the Programme for Government to reduce the discharge time for those declared bankrupt, Mr Shatter said.
Under the planned law, bankrupts will be automatically discharged after 12 years, with bankrupts entitled to apply for early release after five.
Previously, bankruptcy could last for a lifetime and there are more than 300 so-called legacy bankruptcies languishing in the legal system.
The Bill has been given a cautious welcome by groups that have campaigned for broader reforms of Ireland's outdated personal insolvency and bankruptcy regimes.
"This is only one very small part of the jigsaw," said Noeline Blackwell, director general of the Free legal Advice Centres.
"There needs to be a much wider debt-settlement scheme put in place which does not just benefit those who have been wealthy and can afford to use the bankruptcy procedures.
"What is needed is a holistic, non-judicial debt-settlement procedure in order to deal with the terrible over-indebtedness that is crippling the lives of many people for whom bankruptcy is not a practical option," she added.
Under the EU/IMF deal, the Government is required to overhaul Ireland's debtor's regime and a new personal insolvency law is due to be published next year as part of the financial support programme.
The new regime is expected to be based on recommendations by the Law Reform Commission (LRC).
Last year the LRC, the Government's legal watchdog, published its set of recommendations for reform of the law on personal debt.
These include the establishment of a national debt enforcement office to bring debt cases out of the courts and the reform of Ireland's 1988 Bankruptcy Act.
Mark Fielding, chief executive of the Irish Small & Medium Enterprises Association, said that current Irish bankruptcy laws were penal, outdated and anti-entrepreneurial.
"While this initiative is welcome, it should be viewed as a first step, with further progress required to bring our bankruptcy laws in line with other states, including the UK," he said.