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New approach to bankruptcy in Ireland

In England, Wales and Northern Ireland, people with serious debt problems might be able to enter an IVA (Individual Voluntary Arrangement), a DRO (Debt Relief Order) or bankruptcy to deal with their debts. In the Republic of Ireland, there aren't so many options - but the rules about insolvency are changing.

Even though there's still no option to enter an IVA or DRO in the Republic of Ireland, the rules on bankruptcy are being changed, after many years of being called 'draconian'. Under the current legislation, bankruptcy lasts at least 12 years - far longer than in the UK, where bankrupts tend to be discharged after a single year.

Under the new rules, which we'll find out more about by early February at the latest, that 12-year minimum term should shrink to a maximum of five years.

Talking to The Irish Times on Wednesday, Minister for Justice Alan Shatter stressed that the new term for bankruptcy might be five years - or it might be less. And the issue of mortgages might or might not be 'incorporated into the Personal Insolvency Bill'. The Cabinet is still working on the final details, but we should see the legislation 'outlined' within the next two weeks.