Ireland's new insolvency regime came into effect on 3 December 2013. The new regime revamps the existing bankruptcy laws and brings Ireland closer into line with our European neighbours. It focuses on negotiating an arrangement with creditors where possible, with bankruptcy as a last resort.
The much-anticipated part 4 of the Personal Insolvency Act 2012, which implemented the new bankruptcy regime in Ireland, commenced on 3 December 2013. The Courts and Civil Law (Miscellaneous Provisions) Act 2013 incorporating the Office of the Official Assignee into the newly established Insolvency Service of Ireland also commenced on the same day.
The key changes to the bankruptcy regime include:
- An automatic discharge from bankruptcy after three years from the date of adjudication. This three year period applies retrospectively. The court may direct a debtor to make payments to creditors for a period of up to five years from the date of adjudication
- An entitlement for bankrupts to retain specified personal belongings up to a value of €6,000
- An increase in the hardening period in respect of pre-bankruptcy transactions to three years. Asset transfers made by a bankrupt during that time may be reversed
- A requirement that €20,000 be owed to a creditor before he can petition for a debtor's bankruptcy
This new regime should hopefully prevent the practice of forum shopping for bankruptcy that we have seen in recent years.
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