Open consultation for bankruptcy rule changes

The Oireachtas Justice Committee is having an open consultation for people who want to give their view on changing the bankruptcy rules so that a person is discharged after 1 year rather than the present standard of 3 years.

The page with the details can be found here, it closes on the 19th of June.

Our view is that 1yr would be of benefit to the people involved and give some extra creditor compulsion to dealing with debtors. On the other hand, there may be concerns about creditor lead petitions as well as ‘payment orders’ that could still go well beyond the one year term.

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Irish Times cover the story of a person going for bankruptcy and mention

The Irish Times did a story on a person looking to go for bankruptcy and mentioned us in the article.

Conor Pope did a great job of outlining the issues in general and in particular to Rory, but this line sums it “He owes €60,000 to half a dozen lenders including banks, credit unions and credit card companies – an absolute pittance in the scheme of things – but a debt of sufficient size to give him countless sleepless nights“.

While we can’t assure people don’t lose any more sleep, we can help them find a route to finality of the problem and that, rather than superfluous statements about social rights and wrongs is really what this all boils down to.

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Bankruptcy fees increase

It is really unfortunate that upon bringing out new rules on bankruptcy that the cost of doing it went up! The costs will now be €650 for the official assignee (stays the same)  stamp duty of €190 (almost doubles),  €20 affadavit fee, then €50 to athe petition in ‘Iris Oifigiuil’.

The rump of the increase is in the stamp duty at the examiners office, this used to be €80 now it’s more than double that amount. The problem with this is that many people going bankrupt are on welfare and there is no simple path in some cases towards people on the dole being able to raise this money.

We have yet to see a case where it was impossible, often it means borrowing from relatives or getting friends to help out, selling a car or some other asset, but raising the costs just makes it that little bit tougher on people and means there is less money to pay for professional advice, something many of them would do well to obtain.

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Some solutions don’t work

While there is provision within the insolvency code to allow a personal insolvency application with more than €3,000,000 of debt to be considered, it is not highly likely that we will see much of this. The reason being that insolvency solutions are often predicated on some level of reasonable recovery.

This is the same as examinership for companies, so the individual must be a ‘going concern’, where they aren’t then bankruptcy becomes the more viable option which is perhaps also more appropriate.

So the message is simple, don’t try to use solutions that don’t or won’t work. Insolvency is often critiqued for any manner of reasons, but that is in part because it isn’t the actual appropriate solution.

Equally, bankruptcy may not be, we had a client this week who would be better off working with the bank then opting to go to the UK for an IVA style solution, the only thing we know for sure is that there are no forgone conclusions in dealing with debt and each case is unique.

So be weary of getting into what …

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When you go bankrupt you have to stick to the deal, here is why…

We have mentioned before how bankruptcy has some serious downsides, in a recent blog post we covered one case in particular which was back in the press again.

The alleged non-compliance issue regarding Paul Codd resulted in an arrest warrant which could have lead to a risk of further prison time but he now says he was coerced into giving his undertaking to avoid this because it could have resulted in him being there over Christmas.

His bankruptcy came about due to failure to satisfy a judgement in 2011 for more than a half a million euro. Mr. codd alleges that the police came and knocked down his door with a battering ram and it left his children traumatised.

His total estimated debts are thought to be close to €5m. What this story does is bring into focus some of the downsides of bankruptcy, in particular that of non-compliance, you simply can’t get around the decisions made by the Official Assignee.

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DIY Bankruptcy

We have two routes to help you with your bankruptcy, the first is one which has our professional team heavily involved with you throughout the process, but we also have a DIY option which offers a low cost way of doing this.

DIY Bankruptcy ( gives you a face to face meeting with a professional advisor and support to help you get through the process on your own, this is supplemented with videos which will bring you through everything you need to do.

We think that a really low cost choice which still gives you face time with professional advisors and a road map through to the destination will be a popular option for people who want the freedom and finality that bankruptcy offers without the cost you might expect to go with it.

To find out more you can call us or send in a query.

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What happens when you don’t comply?

An important aspect of bankruptcy is how the person deals with the Official Assignees requirements – your compliance makes a big difference. While a person can decide not to play ball, there are consequences to this.

One such example is Paul Codd the former Wexford hurler who spent a weekend in jail for failure to comply with orders surrounding his bankruptcy. His case focused on the failure to comply with an order to return leased machinery and he only avoided more prison time by promising to comply.

So when you are getting your advice (and we always advise going to professionals with relevant qualifications even if it isn’t us) remember that you are not getting a ‘get out of jail free’ card, in fact, messing about with your bankruptcy process will get you jail time in some circumstances as this case showed.

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New bankruptcy guide and scenarios published today

The Insolvency Service of Ireland launched some new information today on the back of the changes announced in Bankruptcy law.

The two main documents are a ‘Debtors Guide to Bankruptcy‘ and a ‘Bankruptcy Scenarios‘ booklet which gives worked examples. These are both welcome publications in light of the new rules.

Some of the main changes we highlighted before were that the need to advertise in the national press will be removed – you will be able to do this on the ISI website in the future and also the lowering of the discharge date down to 3 years automatically (unless the Official Assignee has cause to do otherwise; for non-compliant bankrupts).

These documents are well worth reading before considering bankruptcy, along with the services we help to co-ordinate they will be good to keep on hand for reference purposes.

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