# Does Irish Bankruptcy cover debts to Revenue?



## Alpha16

Hi,

If you go bankrupt in Ireland, are debts owed to Revenue also covered, or would you still owe the revenue any unpaid tax/penalties during and after discharge from bankruptcy?
Will any of this change under the new bankruptcy regime?

Thanks,
Alpha


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## Gerry Canning

Revenue can chase you forever. Normally though they will agree to the Bankruptcy arrangement but if they perceive you as a chancer they never let go! In short NO change.


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## munchy

Not sure if this is helpful or relevant but I discovered that UK bankruptcy clears all revenue debts including those in Ireland. I presume they are bound by EU wide legislation. It does not, however, stop them from prosecuting you afterwards.


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## Jim Stafford

An Irish or UK bankruptcy would clear all Revenue debts, provided the debts did not arise fraudulently.

Jim Stafford


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## Alpha16

Thanks for the replies. One question: what would there be for Revenue to prosecute for if the debt has been cleared, i.e. you do not owe them anything?


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## Bronte

Jim Stafford said:


> An Irish or UK bankruptcy would clear all Revenue debts, provided the debts did not arise fraudulently.
> 
> Jim Stafford


 
Interestingly on the revenue guide to the new property tax they say that it will be not be written off under insolvency but deferred.


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## mandelbrot

Alpha16 said:


> Thanks for the replies. One question: what would there be for Revenue to prosecute for if the debt has been cleared, i.e. you do not owe them anything?


 
Generally you don't get prosecuted for owing tax, you get prosecuted for not filing returns, or deliberately filing incorrect returns etc.

So take a case where you filed false VAT returns to get a refund that you weren't entitled to.

Now, Jim Stafford has said above that fraudulently incurred debt would not be purged by bankruptcy, but lets say for argument's sake that your bankruptcy does clear the VAT debt.It doesn't alter the fact that you could be prosecuted not for having got the refund and as a result owing Revenue the money back, but for knowingly filing a false return, essentially a fraud.


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## Alpha16

That makes sense, thanks mandelbrot


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## Dr.Debt

Up until the new personal insolvency act, recently passed, there was no "automatic right" of discharge for Irish bankrupts under the 1988 bankruptcy act. In fact if you hadnt paid all costs associated with the bankruptcy and any preferential debts (Revenue Commissioners included) then you might never have been discharged.

Under the new act there is automatic right of discharge from bankruptcy after three years with some exceptions (as outlined by Jim Stafford above)


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## Steve Thatcher

As with all these cases, you can tell the truth of whether something is truth or urbam myth by looking at the reality.

There is a poster on here called Jim, who seems fixated that the English Bankruptcy will not clear the Irish debt. It does, simple. But if in doubt consider how many banks have made applications to courts here or in ireland, still seeking to recover debts owed, after a UK bankruptcy. Answer none.
Applying that, Irish Revenue debt is written off and the truth of that is backed up by the fact that the Irish Rev have never sought to recover monies owed to them after a bankruptcy order has been made in the Uk

Steve Thatcher

www.debtoptions.ie


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## Jim Stafford

Steve

You must have mis-read my post.  I said that a UK bankruptcy would clear all Irish Revenue debt, except for any Revenue debt incurred by fraud.

Jim Stafford


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## Gerry Canning

Jim Stafford said:


> Steve
> 
> You must have mis-read my post. I said that a UK bankruptcy would clear all Irish Revenue debt, except for any Revenue debt incurred by fraud.
> 
> Jim Stafford


 Good to know that ,,as there seems to be confusion when our Personal Insolvency act kicks in.
From what you say it means ANY and ALL debt cleared provided that the debt was not created by fraud.


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## JohnD66

From my reading on the Citizens Information site re bankruptcy it's saying that debts are not automatically cleared. See last two lines below ...

*Discharge from bankruptcy*
You are automatically discharged from bankruptcy 1 year (formerly 3 years) after the order of adjudication. Your name will remain on the register, as a discharged bankrupt. If there is an Income Payment Agreement or an Income Payment Order in place, you will still have to comply with it until it expires. These arrangements can last up to 3 years (formerly 5 years).

You can also be discharged from bankruptcy if you meet certain conditions, as follows:

If your assets have been sold and all your costs, fees, expenses and preferential debts (such as certain tax debts) have been paid, it is possible for you to be discharged from bankruptcy even if you have not paid all of your debts.

You can be released from bankruptcy in any of the following ways:


If your creditors have been paid in full
If all of your unsecured creditors give their consent
After agreeing and paying a settlement with at least 60% of your unsecured creditors (called an Offer of Composition)
Automatically after 1 year (formerly 3 years) as noted above
When you are discharged from bankruptcy on grounds 1 to 3 above, any money or property remaining in your estate is returned to you, provided all the costs, court fees, expenses and preferential debts of bankruptcy are paid.

If you are automatically discharged after the end of the normal bankruptcy term without having satisfied your creditors on grounds 1 to 3 above, after discharge all your assets continue to vest in the Official Assignee for payment of all your debts, costs, fees and expenses in bankruptcy.


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## JohnD66

UK bankrupty will write off tax debts according to the UK Citizens' Advice Bureau. It does not comment on Irish tax debts but logically they are just another creditor. The UK bankruptcy would be recognised in Ireland as well from what I've read re EU treaties.


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## Jim Stafford

JohnD66 said:


> From my reading on the Citizens Information site re bankruptcy it's saying that debts are not automatically cleared



All debts, subject to the caveats mentioned above, are cleared upon discharge from bankruptcy. The last two lines that you refer to   explains what happens the debtor's assets.

Jim Stafford


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