Bankruptcy is a Personal Insolvency Option, which is accessible to all. In many instances, the Income of debtors is below the Reasonable Standard of Living set out by the Insolvency Service of Ireland. In these cases bankruptcy is an option to be explored.
Approved PIP offer the service of preparing your Court Papers and escorting you to the court sitting in the High Court.
Bankruptcy is a process where the ownership of an insolvent person’s property transfers to the Official Assignee in Bankruptcy to be sold by him for the benefit of those to whom the individual owes debts (creditors).
Bankruptcy proceedings are brought in the High Court. The application for a Bankruptcy Order is filed in the Office of the Examiner of the High Court. When the person’s property is sold, the Official Assignee will make sure that the proceeds are shared out fairly among creditors and any outstanding debt will be written off.
The Bankruptcy (Amendment) Act 2015 has made several changes to the rules on bankruptcy, including reducing the term of bankruptcy from 3 years to just 1 year.
MAIN CONSEQUENCES OF BANKRUPTCY
- Your property transfers to the Official Assignee.
- You have a duty to contribute from surplus income (income less reasonable living expenses) towards your debts for up to 3 years.
- You are discharged from bankruptcy after 1 year.
- All your debts are written off.
The steps to bankruptcy are as follows
- Transfer € 200 to the Official Assignee in the Bankruptcy Division of the ISI, either electronically or using an interbank transfer. The relevant account details are set out at Appendix 1: Official Assignee’s Account Details
- Prepare Petition, which must be verified by Affidavit and a Statement of Affairs. Both the Affidavit and Statement of Affairs must be sworn. Please read carefully the notes for completion of forms at the links provided at the end of the article.
- File the documents and Statement of Affairs in the Examiner’s Office. You must bring the receipt for the € 200 payment to the Official Assignee with you. You will be provided with a Court date once the Examiner’s Office is satisfied that all of your papers are in order for submission to the Court.
- At the Court hearing the Judge, if satisfied that all qualifying requirements have been met, will make an order adjudicating you bankrupt. Normally you will be served with a copy of the Order of Adjudication (Bankruptcy Order) and Warrant of Seizure by the Bankruptcy Inspector in the Bankruptcy Division of the ISI on the same day
- An appointment will be arranged for you to attend the ISI. You will be interviewed about all of your assets and debts. You must fully co-operate with the Official Assignee and his staff in the administration of your estate.
- Place advert in Iris Oifigiúil & a national daily newspaper* publicising your bankruptcy and the date of your statutory sitting in the High Court. Your creditors may attend the sitting and submit claims or send same to the Bankruptcy Division of the ISI. * The Companies (Miscellaneous Provisions) Act 2013 contains a provision which provides an alternative to the requirement to advertise details of a petition for bankruptcy in a national newspaper. The provision provides for a person to publish details of the bankruptcy on the ISI website, at no cost.
- Periodic reviews (every 6 months) of your financial circumstances and ongoing obligation to co-operate with the Official Assignee and his staff in the administration of your estate.
- Automatic discharge from bankruptcy after 1 year. Ownership of any unsold property or other assets remain with Official Assignee. If an Income Payment Order/Agreement has been made in your case, you must continue to comply with this for up to 3 years from date of Order/signing of Agreement.
The Insolvency Service of Ireland has published information booklets on Bankruptcy, click on the links below to view them.