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More talk of IVAs in Ireland

In recent months, there has been a lot of talk about introducing IVAs (Individual Voluntary Arrangements) in Ireland as an alternative to bankruptcy, and this has continued in an article on independent.ie.

In the article, insolvency expert Tom Kavanagh brands Irish insolvency laws as `draconian`, and says that compared with the laws in the UK, Ireland is in the "Dark Ages".

This, however, may be about to change, as the Government is looking at introducing IVAs.

In Ireland, if a borrower is declared bankrupt, they are `subject to a series of severe legal restrictions for up to 12 years`, while in the UK, bankrupt individuals tend to be discharged after just 12 months. In addition, struggling borrowers in the UK may be able to enter an IVA - allowing them to repay their debts in 5 years, while avoiding some of the consequences of bankruptcy.

At the moment, the closest thing to an IVA in Ireland is known as a `scheme of arrangement`. This involves the borrower becoming an `arranging debtor` and reaching a deal with their lenders to repay a percentage or all of their debt. If an individual enters a scheme of arrangement, they avoid being declared bankrupt. However, it must be approved by 60% of creditors by both number and value before it can go ahead.