A Cabinet meeting is taking place over the phone to approve new bankruptcy legislation.

The legislation will reduce the bankruptcy term from three years to one year. The issue was not considered at Tuesday’s Cabinet meeting due to the discussion on floods.

A Government spokesman said approval was required on Wednesday to ensure the laws would be enacted by Christmas.

Under the legislation a person found to be concealing their assets could face an increased term of 15 years in bankruptcy from the proposed one-year term.

The law currently states the bankruptcy term could be increased from three years to eight if the person is found to be hiding assets.

Minister for Justice Frances Fitzgerald’s memo will also allow for an 18-month bankruptcy discharge for those already in the process for more than a year.

The initiative was first proposed by Labour TD Willie Penrose and backed by the Labour parliamentary party.