Legislative changes bring 800 out of bankruptcy

A change in the law has seen almost bankruptcy end for almost 800 people.

The Bankruptcy Act 2015, commenced earlier in the year, has reduced the bankruptcy period from three years to just 12 months.

The system ensures that those who were made bankrupt before the introduction of the legislation can still benefit from the shortened time period.

Lorcan O’Connor, head of the insolvency service, said the law giving effect to the shorter bankruptcy period had allowed for a transitional provision for those already in the system.

Mr O’Connor said: “793 individuals will be automatically discharged from bankruptcy today. The new one-year term applies to anyone made bankrupt since July 29, 2015.

“For those made bankrupt prior to this date, transitional provisions applied, resulting in the large number of automatic discharges today.”

Those declared bankrupt are kept under strict supervision, transferring a portion of their income, having bank accounts frozen and only being able to hold around €1,000 for general living expenses at any one time.

Since the new legislation, the Insolvency Service has seen a 29 per cent increase in applications for debt settlements compared to the number of applications submitted in the first few months of the year.

Mr O’Connor said 3,500 people had now returned to solvency by getting debt deals overseen by the agency.

Mr O’Connor, added: “It is encouraging to see continued growth in all of the solutions the ISI provide to people in financial difficulty.

“As of today, almost 800 former bankrupts can have a fresh start without the burden of unsustainable debt.

“The new Scheme of Aid and Advice for Borrowers in Home Mortgage Arrears, which provides free access to a Personal Insolvency Practitioner and other professional advice, should ensure that anyone in difficulty can now get the help they need.

“This should result in even more people finding permanent and sustainable solutions over the coming months.”