Shatter to unveil reforms in rules for bankrupts

MINISTER FOR Justice Alan Shatter will unveil details of a radical reform of Ireland’s bankruptcy rules at Government today.

The Cabinet is expected to discuss details of a new Personal Insolvency Bill at today’s Cabinet meeting ahead of the publication of the Heads of the Bill, possibly by the end of the month.

At present, under Ireland’s outdated laws a bankrupt must wait 12 years before discharge. In contrast the period of insolvency is only one year in the UK.

The new law is understood to have made provisions for three different types of voluntary debt settlement, as well as a period of bankruptcy that will last for three years.

Last week, Minister for Finance Michael Noonan disclosed that the new law would offer a judicial route for all types of debt.

The different measures will address varying amounts and forms of debt.

According to an RTÉ report last night, those with unsecured debt with a value less than €20,000 would be allowed apply for a debt relief certificate for one year. This non-court solution would first require the approval of a dedicated insolvency service as well as an independent adjudicator. Longer period of debt settlements, lasting five years and more, would be available for debts for sums greater than €20,000.

The third arrangement would cover mortgage debt and other forms of secured borrowings, as well as unsecured loans. The maximum period would be for seven years. The arrangements would all require voluntary agreement from all the parties.

Bankruptcy, which would require a judicial application, would result in the insolvent person being restricted for a period of three years before discharging the bankruptcy.

In the latest revision to the Memorandum of Understanding, publication of the personal insolvency legislation has been deferred until the end of April.

Asked about the delay last week, Mr Noonan said that there was no dispute between him and Mr Shatter over the legislation and that the main points had been agreed in principle.