Reduction in bankruptcy term to five years begins

by admin

PROVISIONS REDUCING the period of applying for discharge from bankruptcy from 12 to five years and providing for the automatic discharge of bankruptcy after 12 years have been begun by the Minister for Justice.

Alan Shatter announced that the new measures, contained in the Civil Law (Miscellaneous Provisions) Act 2011, came into force yesterday. Other, mainly technical, improvements in bankruptcy law have been in force since the beginning of August.

“While there is still considerable reform required in this area of the law, the commencement of these new discharge provisions completes an important first stage of the modernisation of our personal insolvency regime,” Mr Shatter said.

“One of the immediate benefits of the legislation which comes into force on October 10th is that it will allow for the automatic discharge of some 360 so-called ’legacy bankruptcies’ currently in the system.

“These are bankruptcies which have existed for more than 12 years and where the persons involved could not satisfy the discharge conditions under the 1988 Act. The new discharge provisions will allow these people to move on with their lives and will allow them to fully engage in society without the stigma of bankruptcy.”

While the period for seeking discharge is reduced, the conditions remain the same. These are that a bankrupt will be entitled to a discharge when provision has been made for the payment of the expenses, fees, and costs in the bankruptcy as well as the preferential debts, and that he or she has paid one euro in the euro with such interest as the court may allow or has obtained the consent of all the creditors.

The Minister will introduce further reforms of personal insolvency law early in 2012 in line with the commitments made as part of the EU-IMF agreement.

(The Irish Times, 11th October 2011)

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