New Bankruptcy Laws

Alan Shatter, Minister for Justice has now introduced legislation to reduce the minimum period which a personal bankruptcy is required to last by Irish law. The current position is that all bankruptcies last a minimum of twelve years. That is now set to change to a minimum five years following the passage of the Civil Law (Miscellaneous Provisions) Act, 2011 (“the Act”).

In order for the change to take place the Minister for Justice has to make a commencement order bringing the measure into legal effect.

Provided the bankruptcy has lasted for five years, and once the costs expenses and fees of the bankruptcy have been discharged and the bankrupt’s preferential creditors (e.g. the Revenue Commissioners) have been discharged, then the bankrupt can apply to the Court for a discharge of the bankruptcy.

Furthermore, the Act provides that all bankruptcies will last no more than twelve years. This is a major revision of the current position. The current law provides that a bankruptcy can last indefinitely provided that the bankrupt’s creditors remain undischarged.

It is important to remember that the Minister must commence these provisions in order for them to become effective.

For all matters concerning collection of debts please contact Thomas Mannion