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THE cost of going bankrupt is to be cut in half. The move should make it easier for thousands who have crippling debts to declare themselves bankrupt and deal once and for all with their borrowings.

The development has emerged following the dropping of a requirement that details of a bankruptcy be published in a national newspaper.

Now the details of a bankruptcy will only need to appear on the website of the Insolvency Service of Ireland and in 'Iris Oifigiuil' – the official State gazette.

This cuts the cost of the whole process from €1,450 to €750.

The time penalties associated with bankruptcy are also to be reduced, as Minister for Justice Alan Shatter prepares to sign a new law on the issue into power.

This will allow people to escape from bankruptcy in three years – currently the process carries a 12-year penalty.

However, the new legislation is expected to include a clause to require the bankrupt to pay a contribution from their income for five years in certain circumstances.

It will also increase the level of debt required to make a person bankrupt.

A debtor must owe a creditor €20,000 under the new system before he or she can be forced into bankruptcy or make a petition to declare themselves bankrupt, compared with the current figure of €1,900.