Bankruptcy is a formal Insolvency procedure agreement that can help you deal with your unaffordable debts and can only be explored after you have exhausted all other Insolvency options. It is usually considered as a last resort debt solution.
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 at least €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.
Contact us for a free consultation. We will discuss your situation and explain what options you have available for addressing your debts. We will explore all other Insolvency options with you first, in order to determine if Bankruptcy really is your only option.
If you decide to proceed with Bankruptcy, you will need to complete the required paperwork. You can do this yourself or engage the services of a professional that will help with your Bankruptcy Application. The paperwork can be obtained from the Insolvency Service of Ireland (ISI).
When the paperwork is complete, you need to lodge €200 with the "Official Assignee" and file the paperwork with the Examiners Office in order to get a date for your Court Bankruptcy hearing. You must attend the court on the specified date. If the Judge is satisfied that you meet the relevant criteria, your Bankruptcy is granted.
When the Bankruptcy is granted, you will meet with the Official Assignee, who will interview you regarding your assets and debts. You must co-operate fully and disclose all relevant information requested.
A notice of your Bankruptcy will be published in the Iris Oifigiúil which is the state gazette. A notice of your Bankruptcy must also be placed on the ISI website or in a national daily newspaper.
The Official Assignee will review and oversee your Bankruptcy. On completion, you are discharged from your debts and can start over with a fresh financial start. The Official Assignee maintains ownership of unsold assets. If additional payments have been agreed, you must continue these for up to 3 years.
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.
There are range of Personal Insolvency solutions available in Ireland that all help deal with different kinds of debt. Browse the solutions below or contact us to find out your options.
A Personal Insolvency Arrangement (PIA) is a formal debt solution that is designed to help protect your home and deal with unsecured debts, by way of restructure, to make room for affordability. There are several different approaches to how this can done, depending on your circumstances. Remaining unsecured debts are written off on successful completion.
If you cannot afford your mortgage payments, are facing arrears or repossession or missing debt repayments, then PIA might be a suitable solution for you.
Click the button to find out more about a PIA, or contact us for a free and confidential consultation.
A Debt Settlement Arrangement (DSA) is a formal solution that addresses unsecured debts, such as credit cards, loans, overdrafts etc... In a DSA, you affordable repayments are negotiated with your creditors. Any remaining unsecured debt is written off on completion.
If you are struggling with debts similar to that mentioned above, then a DSA might be a suitable option for you.
Click the button to read more about a DSA, or contact us for a free and confidential consultation and we will advise on your options.
A Debt Relief Notice (DRN) is a formal solution designed to help people who cannot afford to pay their unsecured debts, are on a low income and have little to no assets. A DRN is sometimes referred to as a form of 'mini-bankruptcy'. A DRN usually lasts for about 3 years and debts are written off on completion.
If you meet the criteria above and your total debts are not above €35,000, then a DRN might be a suitable solution for you.
Click the button to find out more about a DRN, or contact us for a free and confidential consultation today.
There are situations where a formal insolvency solution, such as bankruptcy or a structured insolvency procedure, may not be necessary to address financial difficulties. In some cases, an informal arrangement with creditors may be more suitable, allowing you to manage your debts without the formalities and potential limitations of insolvency proceedings. Informal arrangements often provide the flexibility to negotiate directly with creditors, offering a tailored approach that may involve partial debt repayment, an extended timeline or a plan to sell assets in order to discharge creditors in full.
We take a comprehensive approach, assessing your financial circumstances and exploring all available options. Our experienced team carefully evaluates the advantages and disadvantages of both formal and informal solutions, ensuring that you understand the best course of action for your situation. By focusing on a customised strategy, we can often help you achieve debt relief through informal agreements when possible. Click the button and fill in the form for free and confidential advice on your options.
If you are experiencing difficulty with debt (secured or unsecured), but aren't sure what to do about it, then you might like some general advice. Our experienced advisors provide a listening ear and expert advice, so you can gain some clarity on how to deal with the situation.
This service is completely free of charge and will give you the knowledge required to make a suitable choice. If we cannot help you with any of our solutions, we will signpost you to an appropriate provider or charity that can help, such as the Money Advice and Budgeting service (MABS).
Click the button and fill in the form for free and confidential advice on your options..
