Bankruptcies to be reduced to less than 3 years!

J

Jim Stafford

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Joan Burton told the Dail today that she sees "merit" in reducing the bankruptcy period below the current maximum of three years.

Her comments follow a meeting with the ISI and 4 PIPs several weeks ago where the reduction was requested by the PIPs to help PIA's and DSA's become more widespread. There is no doubt that a reduction in the bankruptcy period, particularly if it was accompanied by a reduction in the term of the Bankruptcy Payments Order, would really put more pressure on creditors to accept deals.

Hopefully the Government will make a quick decision and amend the legislation so that the uncertainty is removed.

Jim Stafford
 
That sounds exciting. Something needs to happen as I have taken on 10 new clients in the last two weeks. They are all coming here solely because they want a quick solution. If they could get that at home it would be brilliant for everyone....except me. But hey, I honestly didn't still expect to be taking people through this process now. I wonder how quickly the Dail and Government will move to legislation. The initial bill took ages to come to Statute
 
We found the 18 month UK process to be purgatorial enough - the 3 year Irish process (plus the initial obligatory PIA attempt) is positively hellish in comparison. You 'd have to question the pressure that period of time places on any relationship / marriage - especially considering the likelihood of several years of pre-existing financial stress.
The whole experience was harrowing to be honest. It still is if I were being fully honest. We can't even open a basic bank account in Ireland post discharge!!!
I hope Joan Burton isn't just engaging in opportunistic electioneering!!
 
Unfortunately I would say its just noise from a politician. If she is serious they need to move fast and not sit around for thinking about it for another 3 years.
 
Steve Thatcher said:
I wonder how quickly the Dail and Government will move to legislation. The initial bill took ages to come to Statute
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They have also modified that bill many times already and you make me laugh, no fear of this being sorted any year soon. Election next year too. Not a hope.

This is just Joan electioneering as poster Margot mentioned.

Something seriously wrong if you Steve Thatcher are still getting 10 clients in such a short time.
 
Now that Joan Burton has "let the cat out of the bag" in stating that the Government are considering amending the legislation then they are duty bound to move quickly. Her comments have now created great uncertainty in the market place. How can professionals advise highly stressed clients, some of whom are suicidal, when they do not know what legislative amendments are going to be made?Only last week I had one client move to the UK to go bankrupt (giving fees to UK firms etc) when he may actually be better off over here. He is highly stressed and wants to know if he should return.

The existing legislation is in urgent need of amendment. Last year the Irish Society of Insolvency Practitioners made the following suggestions for legislative reform:

1. All PIPs should be exempt from the Central Bank Regulations on Debt Management advisors.
2. The period for a Bankruptcy Payments Order in a bankruptcy should be reduced from a maximum of 5 years to a maximum of 3 years. Such a change would have a dramatic effect on the demand for PIAs/DSAs, as they would become much more attractive to creditors as opposed to the expected outcome under a bankruptcy.
3. The €3 million threshold on secured debt for debtors seeking a PIA/DSA should be removed.
4. ISI should establish a non-judicial appeal process so that viable PIAs/DSAs which have been unreasonably rejected by a creditor(s) could be considered, and if it was found that the creditor(s) had unreasonably rejected the PIA/DSA that it be formally accepted.
5. The Official Assignee should be obliged to deal with his interest in the family home within a three year period.

The primary reason UK Individual Voluntary Arrangements work so well is that the creditors receive 5 years of payments as opposed to a maximum of 3 years in a bankruptcy.

It is time for the Government to move urgently.

Jim Stafford
 
It is very sad to hear that people are still suicidal. We've been at this so many years now and such hopes for that long long awaited legislation that wasn't fit for purpose. Alan Shatter the genius of that.
 
Bronte said:
Something seriously wrong if you Steve Thatcher are still getting 10 clients in such a short time.
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Thank you for your support. Nothing like being damned with faint praise. I didn't ask for this situation to continue. Frankly I wish I wasn't being called, amazing as that sounds. I have other projects on the go. I'm not profiteering from this but offering a solution many find they can't get in their own State
 
That's my humour Steve. Actually I'm delighted that you've been able to help so many Irish people.

I think it's intolerable that once again England has to help sort out our messes (and you don't want to ask what I mean there but everybody else will know).

It's great that you've been able to help them off the plane to go through a life of hell for a year or so over there to try and get them back on their feet. But one year of penury is worth a lifetime of freedom and the sooner people get back on their feet and become productive members of society the better for Ireland. How long have I and others on here been banging this drum. Too long is how long

Never suggested you were profiteering, but you are making a profit and are entitled to it. People like Jim Stafford and the other on here must be in despair at the amount of lost fees they have due to the incompetency of our own legislation. Look at all the millions going into the White Elephant that is the Insolvency service.

No doubt people like Jim and others have a lot more to say about the mess of insolvency/bankruptcy but are constrained by a small society. Posters, and others, not Jim, have told me so. Banks, revenue, the central bank read AAM. It's a very small banking/legal/government community.
 
It seems she has been considering this for some time. Last month she asked a conference of accountants "Should we, for example, consider reducing the length of bankruptcy from three years to a shorter period?"
Now that the banks are in a stronger position, I can see a reduction in the term, if only for a short period, an amnesty of sorts to purge the system of bad debt. I don't think the banks could of sustained a one year bankruptcy term when the legislation was enacted, asset prices were much lower and their balance sheets not as good as they are now.
 
Stuboy said:
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AS someone recently adjudicated bankrupt this puts some optimism on the horizon. A three year payment order would enable us to start planning our future. 5 years of strict income control is criminal.
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How is this managed on a day to day basis, how are you monitored etc? Can you outline your experiences to date? What would you change, what would you improve, any positives? It must be a relief to have debts written off.
 
Bronte said:
How is this managed on a day to day basis, how are you monitored etc? Can you outline your experiences to date? What would you change, what would you improve, any positives? It must be a relief to have debts written off.
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Your income is reviewed every 6 months by the OA. after each review a monthly standing order amount is requested.
I have only recently started this process. all interaction is handled via e-mail. the people in the OA are very helpful.
Re What I would change? Can't say as yet. still in the first stages of the process. However, as both my wife and I are bankrupt and being assessed jointly, I think their should be an option for a joint bankruptcy application to save on admin costs to the bankruptee. why handle fees separately and place separate ads when a joint one would make more sense? Particularly on the advertising front. this would be an easy change.
and yes, it is a releif to have debts written off, however, We will be effectively homeless very soon. We are awaiting communication with the OA on what is to happen with the house situation. Totally in the dark as to how long we have left in the house, one kid and a wife in exam year so ideally hoping that we will be able to stay until after exams are over before vacating, to give them a stable environment to study and not worry about being homeless. That element is not a relief. The five year payment plan effectively means bankruptcy is a five year sentence. I don't have ambitions to be a company director in the recent future so it is the payment order that determines my time in this bankruptcy. Is it not enough that my home is taken? The move to 1 and 3 years would be a huge boost to morale in the home.
 
As has been said tho, how on earth do you advise, with this uncertainty. I am referring people back to IMHO, and telling them to wait and see. Wait even longer....
I'm really only advising those now who are here to get on with UK. I think that if anyone hasn't started, I'll tell them to hold fire.
Thanks Brontes, by the way.

Can I also say well done the boys in green. Our naive upstarts learned a good lesson on sunday

Steve
 
Stuboy said:
We will be effectively homeless very soon. We are awaiting communication with the OA on what is to happen with the house situation. Totally in the dark as to how long we have left in the house, one kid and a wife in exam year so ideally hoping that we will be able to stay until after exams are over before vacating, to give them a stable environment to study and not worry about being homeless.
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In a similar situation myself, the advise I have got is that even if we were taken to court tomorrow, it would still take, at the very minimum a year before we were evicted. Our house is in huge NE so I believe the OA will return it to the bank and they will rely on their security. If it was positive equity then I think he would have to seek a court order to sell it.
 
So, the proposal has been backed by labour and will be brought forward to dail within weeks.
 
Ivan Yates' article in the Independent today is a timely critique of the Irish Insolvency System. Unfortunately, it seems as if it 's the Labour Party - as opposed to FG - that's pushing for a shorter discharge / IPO period. The banks will do everything in their power to prevent this from happening.
 
Can someone tell me what is the point of being discharged from bankruptcy after 3 years if they can and will put a 5 year payment order on you ?
I assume correctly that the payment order would equal all of your disposable income - therefore you'd financially be in the exact same position as you were during your 3 years bankruptcy?
 
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