Going through a debt crisis can be overwhelming. However, new bankruptcy legislation introduced in January 2016 is designed to make both the process and the aftermath easier to cope with and manage. Whether you are suffering personal and/or business related debt, there are now solutions aimed at resolving these problems.
When it comes to dealing with unsustainable personal debt, there are three main options open to you:
- Try to negotiate a solution directly with your creditors
- Enter one of the Personal Insolvency Arrangements provided through the Insolvency Service of Ireland (“ISI”)
- Declare yourself bankrupt
The decision on which option to choose is hugely important as each process comes with unique advantages and consequences.
Bankruptcy is a suitable option for people who cannot avail of a Personal Insolvency Arrangement or a directly negotiated Debt Settlement Arrangement.
If you make the decision to self-adjudicate as bankrupt the primary benefit is that almost all debts are immediately written off in full. You are entitled to keep assets with a cumulative value of up to €6,000. Any assets over this amount are transferred to the Official Assignee in the Bankruptcy Division of the ISI and they can, in certain circumstances, sell those assets for the benefit of creditors.
The period of bankruptcy is now one year and there are new protections in place concerning the family home.
Recent Changes in Bankruptcy
In January 2016, some very important amendments surrounding the Bankruptcy legislation were introduced. Some of the key changes are as follows:
- The period that you are deemed to be bankrupt has been reduced from three years to one year
- A reduction in the income payment period to creditors from five years to three years
- The legislation now provides for re-vesting of the family home to the bankrupt individual where the official assignee has not issued proceedings for the sale of the family home within 3 years of adjudication of bankruptcy
The information above gives a very brief overview of the bankruptcy process in Ireland. Bankruptcy is a legal event with significant consequences and should only be used as a last resort. Bankruptcy can be a very powerful tool to allow people leave the past behind and to start afresh.
How Can Baker Tilly Hughes Blake Help?
At Baker Tilly Hughes Blake we have years of experience in dealing with companies that have suffered trading difficulties as a result of the economic downturn. We work with these companies to restructure and put them in a position to take advantage of the growing opportunities in the Irish and international economy.
We are now bringing this experience and expertise to benefit individuals who are still struggling with debt.