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Proposals on Personal Insolvency

PRACTICE AREA GROUP: Private Client, Corporate Restructuring and Insolvency
DATE: 01.02.2012

The Minister for Justice and Equality has published details of a proposed Personal Insolvency Bill. It is expected that the Bill itself will be published on 30 April 2012 when further details will then be available. The Minister has invited comment from any interested parties on the General Scheme of the Bill.

The proposed Bill would provide for the establishment of an Insolvency Service to incorporate the new non-judicial insolvency arrangements. The new non-judicial debt settlement system would operate subject to certain conditions.  These would include:

  •  a Debt Relief Certificate to allow for the full write off of qualifying unsecured debt up to EUR 20,000 after a one year moratorium period
  •  a Debt Settlement Arrangement for the agreed settlement of unsecured of over EUR 20,001
  •  a Personal Insolvency Arrangement for the agreed settlement of both secured and unsecured debt of over EUR 20,001.

The Minister has also indicated that he will proceed with reform of the Bankruptcy Act 1988 to allow for the introduction for automatic discharge from bankruptcy subject to certain conditions after three years. The Bill would also propose the introduction of a minimum debt amount of EUR 20,000 in respect of a creditor petition for bankruptcy. Any discharge from bankruptcy could be delayed by the Court up to a maximum eight years for non-compliance, fraudulent or dishonest behaviour for the bankrupt during the process.

In tandem with the proposals, the Minister has indicated that further work will be done to implement the proposals contained in the Keane Report regarding assistance of those in mortgage arrears.


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