On 29 January 2016, the Irish bankruptcy term was reduced from 3 years to 1 year. This Briefing sets out further detail, and summarises recent developments in the area of bankruptcy and personal insolvency.
As signalled in our August 2015 Briefing (
New Court review process available for rejected personal insolvency
proposals), the Oireachtas Joint Committee on Justice, Defence
and Equality recommended to the Minister for Justice and Equality
that the bankruptcy term be reduced from 3 years to 1 year (it had
already been reduced from 12 years to 3 years under the Personal
Insolvency Act 2012).
To achieve this, the Bankruptcy (Amendment) Act 2015 was signed into law on 25 December 2015. Most of the provisions of the new Act(including the reduction in the bankruptcy term) were commenced by SI 34/2016 (Bankruptcy (Amendment) Act 2015 (Commencement) Order 2016) with effect from 29 January 2016.
The key changes introduced by the new Act are as follows:
Bankruptcy term: The standardbankruptcy term is now 1 year ratherthan 3 years.
Bankruptcy Payment Order: Thestandard duration of a BankruptcyPayment Order (a Court orderrequiring a bankrupt to makepayments for the benefit of hiscreditors from any surplus income orassets (after deduction of reasonableliving expenses)) is now 3 years ratherthan 5 years.
Bankrupt's home: A bankrupt'sownership in his home will (ingeneral) transfer back to him after 3years unless:
- the Official Assignee applies toCourt for an order for sale; or
- the Official Assignee and thebankrupt agree otherwise; or
- the Court orders that thehome should not re-vest in thebankrupt or orders that the 3year period be extended.
Other notable changes are as follows...
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.