The Bankruptcy term in Ireland is to reduce to 12 months by year end
Update by Mark Ryan the Quintas Personal Insolvency Practitioner
The Taoiseach Enda Kenny announced this week that the bankruptcy term will be reduced from 3 years to 12 months by the end of this year. I would expect that the current income payment arrangement in bankruptcy will also be reduced from 5 years to 3 years. This change brings us in line with our neighbours in the UK and Northern Ireland.
This is certainly a game changer for debtors and together with the introduction of the Appeals process for failed PIA’s it is certainly a rebalancing of power, which was unfairly balanced in favour of creditors under the current legislation.
Unfortunately it is unlikely that this new change to the legislation will be done retrospectively for those debtors who have already been declared bankrupt.
As someone that has been active in the new personal insolvency and bankruptcy legislation since its inception in 2012 these 2 key changes to the legislation are very welcome but they could easily have been made at the start of the process in 2012.
That said it is encouraging to finally see the government tackle the personal debt problem head on and I would have to commend them for listening to all the interested parties and making the appropriate changes.
This is an important development for the domestic economy as we seriously need to get those living under the cloud of personal debt back to a normal position whereby their debts are manageable and they can return to living a normal life and be able to start spending and contributing to the local economy again.
Most insolvent people having been living below what would be considered a reasonable living standard for the last number of years.
They have also had to live with the stress of their financial position since the economic collapse 7/8 years ago. They have been trying to pay a little bit to everyone although everyone on both sides of the table know that they will never be able to pay back all of their debts.
At this stage and assuming they qualify for one of the insolvency arrangements (PIA/DSA) rather than bankruptcy, it will be at least 5/6 years before they exit the personal insolvency process, which will ensure that they can finally move on with their lives. Can you imagine spending 12/13 years of your adult life attempting to manage your debts, its almost a life sentence.
The intention of the personal insolvency process was to allow debtors where possible to keep their family home, ensure they contribute the maximum amount of their income towards their debts, give a fair return to all creditors, ensure they return to solvency at the end of 5/6 years arrangement and be a better alternative to bankruptcy.
The personal insolvency legislation is the only permanent solution to dealing with your debts. It gives a fair return to all creditors and it finally gives a bit of light at the end of the tunnel for the debtor that they can at least look forward to better times. I would hope that these changes will allow those in debt step forward and get the help they need to return to solvency.
Quintas are currently running open information evenings on debt resolution. If you would like to avail of a FREE 1:1 appointment with Mark Ryan the Quintas Personal Insolvency Practitioner (PIP) contact us on 021 4641400 or email info@quintas.ie
