New bankruptcy legislation signed into law

Minister for Justice and Equality, Frances Fitzgerald, has signed into law new bankruptcy legislation which will reduce the bankruptcy term from three years to one year.

The new legislation will reduce reduce the income payment period from five years to three years, providing for the bankrupt person’s ownership in their home to “re-vest” in them after 3 years if the official assignee has not applied to Court for its sale.

The legislation also widens the powers of the Official Assignee to disclaim assets in bankruptcy estates which have no value to the estate, yet may involve a burden on the estate.

Minister for Justice and Equality, Frances Fitzgerald said the Act is a significant reform of Ireland’s bankruptcy laws and reflects a fundamental shift in attitudes towards indebtedness.

“Our legislation no longer punishes people who, in most cases, through no fault of their own find themselves with intractable debt.”

She said the new Act will remove unnecessary costs and delays for debtors and creditors, free up court time and resources, and allow more efficient and effective bankruptcy administration.

“The legislation is only one of a number of measures which this Government has taken since 2012 to support and give hope to people in genuine financial distress. Those measures have been tailored to give people a fresh start and return to normal economic activity, much more quickly.”

Lorcan O’Connor, director of the Insolvency Service of Ireland, said the removal of the so called bank veto and the reduction in the bankruptcy term means that there has never been a better time to take the first step to solvency and a fresh start.

He encouraged debtors to seek the advice of a personal Insolvency practitioner or approved intermediary.