# Bankruptcies to be reduced to less than 3 years!



## Jim Stafford (26 Feb 2015)

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


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## Steve Thatcher (26 Feb 2015)

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


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## 44brendan (26 Feb 2015)

Unfortunately the Government needs to review the whole Insolvency process as it patently is not working.


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## Margot Tenembaum (26 Feb 2015)

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!!


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## Stuboy (27 Feb 2015)

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.


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## Bronte (27 Feb 2015)

Steve Thatcher said:


> I wonder how quickly the Dail and Government will move to legislation. The initial bill took ages to come to Statute


 
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.


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## Jim Stafford (27 Feb 2015)

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


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## Bronte (27 Feb 2015)

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.


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## Steve Thatcher (27 Feb 2015)

Bronte said:


> Something seriously wrong if you Steve Thatcher are still getting 10 clients in such a short time.



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


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## Bronte (27 Feb 2015)

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.


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## Matthew Moore (27 Feb 2015)

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.


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## Matthew Moore (1 Mar 2015)

"Westmeath Longford TD Willie Penrose is due to introduce a bill next week to reduce the bankruptcy period from three years to one year." http://www.rte.ie/news/2015/0228/683449-labour-party-conference/


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## Stuboy (2 Mar 2015)

A





pat2 said:


> "Westmeath Longford TD Willie Penrose is due to introduce a bill next week to reduce the bankruptcy period from three years to one year." http://www.rte.ie/news/2015/0228/683449-labour-party-conference/


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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## Bronte (2 Mar 2015)

Stuboy said:


> A
> 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.


 
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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## Stuboy (2 Mar 2015)

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.


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.


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## Steve Thatcher (2 Mar 2015)

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


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## Matthew Moore (3 Mar 2015)

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.



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.


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## Stuboy (5 Mar 2015)

So, the proposal has been backed by labour and will be brought forward to dail within weeks.


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## epicaricacy (5 Mar 2015)

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.


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## Kitty1 (9 Mar 2015)

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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## DebtCert (9 Mar 2015)

When you get discharged, the restrictions which apply during bankruptcy no longer apply.  So, you can be a company director or secretary. You can borrow money and do not have to tell the lender you are bankrupt (since you aren't). You can acquire and retain assets - the OA will have no interest in them.


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## Stuboy (10 Mar 2015)

DebtCert said:


> When you get discharged, the restrictions which apply during bankruptcy no longer apply.  So, you can be a company director or secretary. You can borrow money and do not have to tell the lender you are bankrupt (since you aren't). You can acquire and retain assets - the OA will have no interest in them.


Yes but if the payment order goes on for another 2 years that does affect your income. You are still restricted in those terms, the main terms that affect your average person. Also any inheritance in those two years following discharge are affected by the payment order. Your average person looking at bankruptcy now couldn't give a toss about being a company director.


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## epicaricacy (10 Mar 2015)

'You can borrow money and do not have to tell the lender you are bankrupt (since you aren't). '

A record of your bankruptcy remains on the ICB for 6 years post discharge - which will probably result in a loan refusal. Even the credit unions now check the ICB before deciding on a loan greater than the amount one has in savings.


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## Matthew Moore (12 Mar 2015)

The Bill was presented yesterday, it'll be interesting to see how this plays out. Labour seem all for it, Fine Gael not so much. There is a provision to have reduce bankruptcy to 1 year, reduce IPOs to 3 years and have any principle residences in control of the OA returned to the bankrupt if the OA has not sold them within 3 years. 
Any changes will be applied to bankrupts currently in the system, if they are bankrupt for a year or more they will be discharged 3 months after the legislation is enacted.

http://www.oireachtas.ie/viewdoc.asp?DocID=28506&&CatID=59


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## Steve Thatcher (15 Mar 2015)

pat2 said:


> The Bill was presented yesterday, it'll be interesting to see how this plays out. Labour seem all for it, Fine Gael not so much. There is a provision to have reduce bankruptcy to 1 year, reduce IPOs to 3 years and have any principle residences in control of the OA returned to the bankrupt if the OA has not sold them within 3 years.
> Any changes will be applied to bankrupts currently in the system, if they are bankrupt for a year or more they will be discharged 3 months after the legislation is enacted.
> 
> http://www.oireachtas.ie/viewdoc.asp?DocID=28506&&CatID=59



This is precisely the situation in the UK. If it is approved as it should be then there will be no need to move to the UK for bankruptcy. For the life of me I can't understand why this wasn't implemented from day one.


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## Brendan Burgess (15 Mar 2015)

pat2 said:


> have any principle residences in control of the OA returned to the bankrupt if the OA has not sold them within 3 years.



How does this work in practice? 

John goes bankrupt while jointly owning a family home with Mary which has positive equity of €100k. 
OA tends to hang on to these and Mary tends to pay the mortgage. 
OA will now insist on selling it. 

This could benefit Mary if she is in a position to buy it.
If not, she will lose her home. 

Brendan


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## Steve Thatcher (16 Mar 2015)

Brendan Burgess said:


> How does this work in practice?
> 
> John goes bankrupt while jointly owning a family home with Mary which has positive equity of €100k.
> OA tends to hang on to these and Mary tends to pay the mortgage.
> ...



What could probably happen is that the OA will take a formal charge over the property for half the equity, not just then €50,000 equity attributable to the bankrupt. As and when it is sold, the OA would get half the equity at that time.
In the UK the non bankrupt generally has a year to deal with buying out the equity before the OR will decide to take action to possess.


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## Brendan Burgess (16 Mar 2015)

Steve Thatcher said:


> In the UK the non bankrupt generally has a year to deal with buying out the equity before the OR will decide to take action to possess.



That seems fair enough. But it won't reduce the number of repossessions. It will actually increase them. 

Brendan


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## Matthew Moore (16 Mar 2015)

Steve Thatcher said:


> For the life of me I can't understand why this wasn't implemented from day one.


I imagine the banks balance sheets could not sustain widespread bankruptcies at the time it was introduced, a slow bleed was probably more preferable. I'm sure these new proposals will meet significant resistance too.


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## Silvio Dante (20 Apr 2015)

http://www.independent.ie/irish-new...ed-in-row-over-bankruptcy-terms-31155477.html

I am amazed this issue isn't getting more coverage.
I have spoken to Willie Penrose on this and he is not for turning.
He is clearly furious with FG as when he introduced the bill last month he felt he had their backing.
The Government has now been forced to put back their mortgage package announcement for a few weeks as clearly Labour know if it is announced and the one year bankruptcy isn't included then it will die a slow death in Private Members lottery.
The Government are mustard keen to get these proposals out as an election boost so the delay means there is a massive row going on in Government.
Labour cannot be made look like fools here and they know it.
FG similarly cannot be made look like they are in bed with the banks (which is what Penrose is now cleverly alleging) 
So for political reasons I think FG will grudgingly let it in.


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## Gerry Canning (20 Apr 2015)

Our Government appears hell-bent on selling AIB/Ptsb as soon as possible.
To reduce Bankruptcy would mean a lump of  quickly realised losses on AIB/PTSB books.
Much better to stall and sell at a better price on the (hope) debts will get resolved in a slower time-frame.

We simply need more Bankruptcies/ Repossessions were necessary , this Phoney war has the appearance of (Protect the banks balances) and to hell with forcing conclusions.


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## breakonthru (20 Apr 2015)

From conversations i've had with other BTL investors, none of them will 'willingly' enter a 3 year bankruptcy / 8 year payment order situation.  

Why go bankrupt now, voluntarily?  Much better to being forced by the banks at their expense and time - the ultimate outcome being pushed out ad infinitum?


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## Matthew Moore (20 Apr 2015)

Silvio Dante said:


> http://www.independent.ie/irish-new...ed-in-row-over-bankruptcy-terms-31155477.html
> 
> I am amazed this issue isn't getting more coverage.
> I have spoken to Willie Penrose on this and he is not for turning.
> ...



Their language seems to me to suggest that FG see the term as having and requiring a punitive element. 

Surely an economic benefit is to return citizens to normal functioning spenders. I think linking it to the mortgage arrears problem was a mistake, it gave FG a stick to hit it with. I believe most people who need bankruptcy accept that losing your house is very likely.


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## breakonthru (20 Apr 2015)

I've no evidence; just surmising from all I've read - that the banks are loathe to crystallise loans in negative equity..

Better that some regular payments are made (however small by debtor) in the hope that in time, assets appreciate to wipe out negative equity..

I just don't see the 'financial' sense in banks chasing, berating, initiating legal proceedings to someone like me for extra payments - other - then to fulfill some central bank / political diktats foisted upon them due to Gov. shareholding in same..

The reality for banks is this -

A) negotiate best they can with debtor and bide their time till neg. equity is gone, then swoop in and take assets AND petition bankruptcy on debtor.

OR

B) initiate legal proceedings, call in receivers, reposess, crystallise losses AND after all tgat expense and loss - petition bankruptcy on debtor. 

Surely A) is what the banks really want?


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## michaelg (21 Apr 2015)

Personally, I've had about 4 years of serious stress in worrying about NE /arrears and banks who would not negotiate any realistic solution with me, I'm under the impression they just want to draw the whole thing out indefinitely with me, that's really great for your mental health.
 I've had so many sleepless nights over the last few years , I'm sick of it, they can have my house and if it must be 3 years of bankruptcy to appease fine gael so be it, but i wont ever be voting for them or FF again. 

In Bankruptcy people likely loose everything, that's if they have anything left to loose, why on earth punish them for any longer than necessary.


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## Gerry Canning (21 Apr 2015)

I am getting vexed over this whole arrears/mortgage/bankruptcy mess.

Had an arrears customer gone down for Manslaughter they could be out in 4 years! yet michaelg has 4 years so far!

Maybe it is now time for those in his position to stop paying anything , await court and explain their attempts to resolve matters to the Judge.
I have a sneaking doubt that Banks are not really in a resolution mode , more a waiting mode ,in that values will increase and woe betide the poor saps that staggered on and paid a little. I have little doubt that those who paid as best they could will eventually not only lose the house but will be treated no better than the leg lifters.

michaelg.
Bankruptcy gives closure and you MUST be allowed reasonable living expenses.
From what I see of reasonable living expenses your position would improve.


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## Silvio Dante (21 Apr 2015)

It is to my mind hugely significant that such a senior figure as Brendan Howlin has said there is no turning back for Labour on this issue and I am far more confident than a few days ago that FG will have to yield on this.
Look, if the whip wasn't in force on this it would pass a Dail vote with 80% in favour, FG know this and that is why those in FG who are most opposed wont even put their names to it simply using "government source" cop out.

michaelg's point on FG "source" essentially saying bankrupts needed to be punished for at least 3 years is very revealing of a still appalling mindset in Ireland.
It is due to how we were educated and influenced by church (I'm not anti church btw) so bankruptcy (just like a range of other issues) must be accompanied by shame, guilt, remorse and most importantly penance.
Rubbish and whatever "source" within FG who has this mindset is lacking any sort of rounded intellect.
Bankruptcy is about reaching a fork in the road where there is no other solution but to surrender whatever remaining assets you have, give them to your creditors and then get back up and start again from scratch asap and not wallow in limbo for years after your assets have been distributed.
There should be no element to it after this that one should go sit in the corner with a dunce's hat for 3,5 12 years.


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## Stuboy (21 Apr 2015)

Silvio Dante said:


> It is to my mind hugely significant that such a senior figure as Brendan Howlin has said there is no turning back for Labour on this issue and I am far more confident than a few days ago that FG will have to yield on this.
> Look, if the whip wasn't in force on this it would pass a Dail vote with 80% in favour, FG know this and that is why those in FG who are most opposed wont even put their names to it simply using "government source" cop out.
> 
> michaelg's point on FG "source" essentially saying bankrupts needed to be punished for at least 3 years is very revealing of a still appalling mindset in Ireland.
> ...


I agree. As a bankrupt I have given everything I have of value i.e. The house. So that I can resume my, my wife's and most importantly my children's lives. Why take everything of value and keep taking for 5 years?


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