Oireachtas Justice Committee publishes report and recommendations

The full report with all the submissions from organisations are here http://www.oireachtas.ie/parliament/media/committees/justice/Bankruptcy-Report-for-publication.pdf



Conclusions and Recommendation

Based on the submissions, the Committee concluded that a number of possible recommendations should be considered:

1. Retain the term at 3 years.
As the term has only been reduced relatively recently it may be too early to further reduce it as any long term effects may not yet be apparent;

2. Reduce the term to 1 year.
This is based on the view expressed in the majority of submissions;

3. Retain the 3 year term but allow for an application to be made for a reduced term in certain specified circumstances. A reduced term could be considered where there is no evidence of recklessness;

4. Reduce the term to 1 year but provide for an application for an extension by the Official Assignee of up to 3 years in certain circumstances.

A term of between 1 year and 3 years could apply to a bankrupt in certain circumstances, for example: where non-cooperation with the Official Assignee is evident; there is excessive unsecured debt (as opposed to mortgage or business debt); the “moral hazard” issue whereby bankruptcy is more attractive than other more equitable solutions.

Recommendation:
The Committee’s recommendation to the Minister for Justice and Equality is conclusion number 4 above – a reduction in the term to 1 year but provide for an application for an extension by the Official Assignee of up to 3 years in certain circumstances.

Overall it's disappointing. They have missed the point that the term of the Income Payments Order is the most critical bit.

One of the suggestions in my submission, gets a mention

Rather than reducing the term in all cases, the argument was made that the Official Assignee should be given the right to apply to the High Court to discharge the bankrupt earlier. This would occur where the bankrupt has cooperated with the process and there is nothing further to be gained by enforcing the full three years.

Brendan Burgess said:

Overall it's disappointing. They have missed the point that the term of the Income Payments Order is the most critical bit.

One of the suggestions in my submission, gets a mention

Rather than reducing the term in all cases, the argument was made that the Official Assignee should be given the right to apply to the High Court to discharge the bankrupt earlier. This would occur where the bankrupt has cooperated with the process and there is nothing further to be gained by enforcing the full three years.

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Just had a read through...Yes, their recommendation is very light, but I guess they were tasked with making a recommendation on the term and not much else. they do highlight issues that should be considered e.g. the IPA etc. but there is not a lot of weight given to it. I've said it before: being a bankrupt doesn't;t bother me; I don't want to be a company director any time soon or run for the public office, however the 5 year IPA prevents me and my family from functioning in society for a cruel length of time.

Hi,
My guess is there was a flurry of action yesterday (not bigging us up but quite possibly some of it due to our actions yesterday) to ensure the recommendation was met before the recess as agreed.
The penny dropped that this legislation was going to slip outside lifetime of this Dail and the tempo was increased to prevent that.
The committee was not even due to discuss this yesterday.
Therefore I am not surprised it is light/short.

I'm definitely in the glass half full camp.
We have the core change secured providing it isn't further resisted (I believe the bill sponsors feel the resistance has been dealt with).

The headline was always going to be the "1 YEAR"
That is now done.

The ethos here is to allow a bankrupt to get back once he has his affairs dealt with so I don't think they will contradict themselves by leaving a penal IPA/IPO in place.

Penrose's bill says a max of 3 year post adjudication for any IPA/IPO and I believe that's what will be mirrored in legislation.
Stanton has all but said the same this morning

I'm with Silvio Dante on this one, they could have recommended any one of the other options which would have kept the standard term at 3 year. So it's definitely a step in the right direction.

My biggest concern now would be the OA's ability to apply. On what grounds would he apply?, he has stated to me directly on the IPO side of the house he will apply for a blanket 2 year IPA. Would this apply for the bankrupt term if you were earning and could make a payment as part of your payment agreement?

Does anyone know is the intention for the Dail to accept the recommendation prior to their recess on Fri July 17th?

MikeL2007 said:

Does anyone know is the intention for the Dail to accept the recommendation prior to their recess on Fri July 17th?

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Mike

Things just don't move that fast. They have made a recommendation. The Minister for Justice and her department will think about it. They might make a recommendation to government in the autumn. I doubt very much anything will happen before then.

Then it would have to go through the process in the Oireachtas which would take a few months. It's a change in legislation and not just a ministerial order.

And you can be sure that the Credit Unions are lobbying furiously against any change. And they have real power.

I strongly suggest that those of you who are bankrupt form a group and lobby on this issue. There is a real danger that you will be well out of bankruptcy by the time the law is changed, if it's changed.

Brendan

This looks like giving more power to the OA, and by extension your creditors, since now they can hold an additional two years over you. In the UK it is one year and that's it. No uncertainty. In Ireland the system is still designed to extract as much for the creditors as possible and punish the debtor. There is no sense the system is designed to forgive debt and get the debtor earning and productive again.

I'm still going bankrupt in the UK. Then I'll stay here, and give tax to the UK government. Meanwhile, our government keeps sucking more money out it's people to keep the German version of Fianna Fail in power in Germany. The Irish economy shrinks and shrinks until it is the 1980's again. When everyone was poor, but sure our exports were great and that is all that matters. Yes, I'm bitter, but over here I feel I can heal and put it behind me.

The UK's Official Receiver (or an Insolvency Practitioner appointed as Trustee over a bankrupt's estate) can extend the bankruptcy term using a Bankruptcy Restriction Undertaking (BRU) or a Bankruptcy Restriction Order (BRO). This usually happens if attempts are made to hide assets, or gambling contributed to the financial distress. Not co-operating with the OR will also lead to a BRO.

Brendan Burgess said:

Mike

Things just don't move that fast. They have made a recommendation. The Minister for Justice and her department will think about it. They might make a recommendation to government in the autumn. I doubt very much anything will happen before then.

Then it would have to go through the process in the Oireachtas which would take a few months. It's a change in legislation and not just a ministerial order.

And you can be sure that the Credit Unions are lobbying furiously against any change. And they have real power.

I strongly suggest that those of you who are bankrupt form a group and lobby on this issue. There is a real danger that you will be well out of bankruptcy by the time the law is changed, if it's changed.

Brendan

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I find it hard to believe that it will take 2 more years to get this into legislation Brendan, especially if the Labour party are pushing this coming up to an election via Willie Penrose - considering an election is likely to be called this side of Christmas

TLO said:

The UK's Official Receiver (or an Insolvency Practitioner appointed as Trustee over a bankrupt's estate) can extend the bankruptcy term using a Bankruptcy Restriction Undertaking (BRU) or a Bankruptcy Restriction Order (BRO). This usually happens if attempts are made to hide assets, or gambling contributed to the financial distress. Not co-operating with the OR will also lead to a BRO.

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Thanks TLO, always good to have more real information. It looks like the focus there is to ensure people don't try to hide assets and co-operate, that makes sense. The gambling thing sort of does too I guess. In my case all my assets are sold including my home and the money given to my creditors. The difference I see is here, the system is designed to punish you into the future as long as possible just for going bankrupt. It is to punish and to discourage others from doing the same.

We're taking Germany's approach to Greece basically.