Minister for Justice Alan Shatter today published the long-awaited Personal Insolvency Bill aimed at reforming insolvency laws, some of which have been in place for over a century.
The Personal Insolvency Bill 2012, approved at last Tuesday's Cabinet meeting, provides new and more flexible options to address the circumstances of insolvent debtors.
Mr Shatter said it was in line with the commitments in the Programme for Government and the EU-IMF Programme of Financial Support for Ireland.
The Bill includes a number of new non-judicial debt resolution processes including:
- a debt relief notice to allow for the write-off of qualifying debt up to €20,000, subject to a three year supervision period;
- a debt settlement arrangement for the agreed settlement of unsecured debt over 5 years;
- a personal insolvency arrangement for the agreed settlement of secured debt up to €3 million (though this cap can be increased) and unsecured debt over 6 years.
The Bill also provides for automatic discharge from bankruptcy, subject to certain conditions, after three years, compared to 12 years at present.
The Minister told a news conference he expected the Bill to become law by mid-November. "This Bill is designed to provide a modern insolvency process in Ireland which addresses the obligations of debtors and the rights of creditors in a proportionate and balanced way having regard to the financial reality of an individual's true circumstances," he said.
"I am convinced that new personal insolvency laws will provide a significant incentive for financial institutions to develop and implement realistic agreements to resolve debt issues with their customers," Mr Shatter added.
Fianna Fáil’s justice spokesman Dara Calleary said the legislation was overdue. "It has taken six months for the Government to progress this vital issue while the scale of the personal debt crisis facing thousands of people has worsened,” he said. "We welcome the decision to reduce the bankruptcy discharge period to bring it into line with the European norm."
