Going bankrupt can help you to regain control over your financial affairs, when you can no longer afford to pay your debts. To declare bankruptcy, your debts (secured or unsecured) must be more than your assets by atleast €20,000. Irish Bankruptcy laws have recently been amended in order to bring them more up to date. You can now have automatic discharge from Bankruptcy (subject to certain conditions) after 3 years where it used to be 12 years.
In Bankruptcy, your assets are transferred to a trustee. The trustee is the person who is put in charge of your assets by the court. When the property or assets are sold, the costs, expense, court fees and any priority debts are paid. After this, any net proceeds are distributed to the remaining creditors.
You may be requested to contribute your surplus income (being the surplus amount after you pay your mortgage/rent and reasonable living expenses) towards your bankruptcy for a period of up to five years.
In nearly all cases, the Official Assignee, an officer of the Courts Service, is the trustee to whom the assets are transferred.
Proceedings are brought to the High Court. The application for a bankruptcy order is filed in the Office of the Examiner of the High Court. Following this, the proceedings are dealt with by the High Court.
If you would like to find out more about going Bankrupt or to find out what other options are available, fill in the form and one of our advisors will call you for a chat. At McCambridge Duffy, we offer free and confidential advice and we do not charge any upfront or consultation fees.
You may bring a petition for your own bankruptcy where you are unable to pay debts to creditors and where your available estate (for example assets and property) is sufficient to produce at least €1,900.
You must provide an affidavit that you have made reasonable efforts to reach an arrangement with your creditors. This can be done by investigating the possibility of entering a Debt Settlement Arrangement (“DSA”) or Personal Insolvency Arrangement (“PIA”). You must also show that your debts exceed your assets by at least €20,000. The Court must be satisfied that you are unable to meet your obligations with creditors for the petition to be granted.
A creditor may petition for bankruptcy against you if you have committed an act of bankruptcy within the previous three months. The most common acts of bankruptcy relied upon by a creditor are:
For a creditor to be entitled to petition the court to make a you bankrupt, a number of conditions must be met. These include:
The creditor's petition must state whether any security (for example, a mortgage or a charge) is held by them in respect of the debt. If so, the creditor must indicate whether he/she intends to give up the security for the benefit of other creditors or put a value on their security.
The Court will also consider whether a DSA or PIA would be a more appropriate solution for you before granting a Bankruptcy petition.
You must co-operate fully with the Official Assignee’s office in all matters relating to your going bankrupt. You must inform the Official Assignee if you change address. Initially you must attend for interview with the Official Assignee. You must also file a Statement of Affairs in the Office of the Examiner of the High Court.
The Statement of Affairs must set out all of your financial details including assets held and all amounts owed by you. The statutory court sitting will only be passed in the High Court when your Statement of Affairs has been filed. You also have other legal obligations in connection with the administration of your estate and assets. This includes: the delivery of your accounts or papers to the Official Assignee when requested, the delivery of your title deeds to property and any other possessions to the Official Assignee, assisting the Official Assignee in the administration of your estate, and disclosing any property acquired by you since the date of your bankruptcy Order to the Official Assignee. Where you fail to co-operate with the Official Assignee, the High Court may summon you to examine you under oath.
Following adjudication (the court order making you bankrupt) a notice of this is published by the petitioning creditor or you (if you have made yourself bankrupt) in one national and one local newspaper. This notice will also contain information about the next statutory court sitting. A local newspaper is one which is published in the area where you live or carry on business.
Other creditors may appear at the statutory court sitting and may make a claim under the bankruptcy. Other notices are also published at various stages of the bankruptcy, such as advertising for creditors and notice of discharge of bankruptcy. There is a register in the Office of the Examiner of the High Court and searches can be made against this register.
You may apply to the High Court within 3 days of receiving the order. You must provide reasons why you should not have been made bankrupt. This is called a ‘show cause’ application.
All property held by you when you are made bankrupt vests in the Official Assignee for the benefit of your creditors. The role of the Official Assignee is to sell or otherwise dispose of this property (called realisation) and distribute the proceeds to your creditors. A vesting certificate is lodged in the Office of the Examiner of the High Court and with the Property Registration Authority. This document records the interest of the Official Assignee in any property held by you at the date of adjudication. It means that you cannot sell or use this interest in the property as security to take out a loan. The only property that does not vest in the Official Assignee is essentials up to a value of €6,000 (or more if the High Court allows). Any property you acquire after you are made bankrupt, transfers to the Official Assignee, if and when the Official Assignee claims it.
Under EU legislation, (EU Insolvency Regulations 2002) bankruptcy proceedings in Ireland may be recognised as proceedings in most other EU member states. In most cases, this should allow the Official Assignee to realise such property for the benefit of your creditors.
The High Court may appropriate your salary or pension for the benefit of your creditors. However this is subject to any provision the High Court may make to meet your family responsibilities and your personal situation.
You can operate a bank account. However if you obtain credit of €650.00 or more without disclosing your bankruptcy, you are guilty of an offence.
You must trade in your own name. If you trade in a name other than that in which you were made bankrupt without disclosing this name, you are guilty of an offence. You must notify the Official Assignee of any business or trade in which you engage.
No, under the Companies Acts it is an offence for a bankrupt to act in various capacities in relation to a company. These include director, auditor, manager, liquidator or receiver of a company.
Yes, you can continue in current employment or seek new employment.
There is no outright prohibition on you from travelling abroad but you should inform the Official Assignee if you intend to do so. You may be arrested if it appears to the High Court that you may be leaving the State in order to avoid the consequences of being made bankrupt.
Yes, if you are bankrupt you are not entitled to hold elected representative office, in local authorities, in the Dáil or the Seanad.
No, the Register is a record of all bankruptcies, including those that have been discharged. A person searching the Register is told the status of the bankruptcy (discharged) and the date it was discharged. No information is given about the address of the former bankrupt.
Your interest in the family home, as the bankrupt, vests in the Official Assignee as with all other property. However the Official Assignee may not sell the family home without obtaining permission from the High Court. Where the Official Assignee seeks this permission, the High Court may postpone the sale of the family home having regard to the interests of the creditors and of any spouse or dependants you might have.
Then this is a secured loan against the property and the Official Assignee’s interest only relates to the equity remaining in the property.
Where you own property jointly with a spouse or partner who is bankrupt, this causes the joint ownership to be split. The Official Assignee and the non-bankrupt co-owner then hold separate interests in the property.
The Official Assignee may apply to court for the appropriation of part of your salary, income or pension. If the High Court directs any deduction to be made, it may have regard to your family responsibilities and personal situation. Social welfare and unemployment payments are not liable to appropriation.
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