A challenge to Ireland\u2019s arcane insolvency regulations may perhaps be made to the High Court within just a few months, as per a newly released report in The Sunday Independent by Maeve Sheehan. <\/p>\n\n\n\n\n\n\n\n
This is truly an significant occurrence if a challenge is made due to alleged breaches of the constitutional rights of people dealing with personal bankruptcy. It is surely astounding if this should arise and turn into the catalyst for reform of the statutes and the launching of brand new laws on individual personal debt combined with debt rules. It would be unfair to accuse the fresh Fine Gael – Labour coalition government of sitting on its hands on this subject, given the inertia and inaction of the most recent Fianna Fail – Greens administration, that could not manage to get thier combined heads round the concept of private debt forgiveness. The new administration has had a lot of significant sovereign and banking money challenges to tackle however it’s now time to attend to business that would benefit the individual citizen.<\/p>\n\n\n\n
At this time there is \nno shortage of opinions or lobbying by vested interests in particular \nbanks and lenders. Needless to say any level of individual debt \nforgiveness as distinct from forbearance will certainly have a negative \nimpact on the results of banks and other creditors. Bad debts will \ncrystallize and bad debt provisions will need to be increased. So many \nvaried suggestions have been stated by so many experts and lobbyists \nranging from financial \u2018experts\u2019 to barristers to accountants to \nbankers. They wax lyrically on issues such as moral hazard, can\u2019t-pay \nversus won\u2019t-pay, and other such red herrings while the personal \nfinancial pain of the insolvent citizen goes for the most part unheeded.\n <\/p>\n\n\n\n
The extensive and precise proposals crafted by the Law Reform \nCommission (LRC) related to private indebtedness clearly endorsed the \nvalue of integrating private debt forgiveness in any impending \nlegislation on personal insolvency. Yet senior civil servants have \ndescribed the proposed change of Irish insolvency legislation as unfair \nfor the reason that it is \u2018very debtor friendly\u2019! While recognizing that\n many Irish people have debts that they will never reasonably be have \nthe ability to settle, the concept of private debt forgiveness is \ndiscarded on the argument that it is not just the banks and other big \ncredit houses which will suffer, but also many ordinary small businesses\n and self employed people such as tradesmen, small building contractors,\n architects and other people who will be left without payment by \ndefaulting borrowers who may be \u2018forgiven\u2019. This is laughable and anyone\n who appreciates how personal insolvency laws operate in the United \nkingdom for example would quickly understand that. <\/p>\n\n\n\n
The LRC has \nalready carried out all the heavy lifting. The investigation has been \ndone. Specialists have been conferred with at home and in other \ncountries. Numerous overseas jurisdictions have been checked out and \nbenchmarked. The credit and insolvency industries have given their \nfeedback. The LRC has issued its final report Personal Debt Management \nand Debt Enforcement in December 2010. The EU\/IMF\/ECB has laid down \nMarch 2012 as the deadline for reform of Irish personal insolvency law \nwhich includes reform of bankruptcy law. The LRC advises that any new \nIrish insolvency legislation should stress the \u2018fresh start\u2019 idea on \nwhich much of the most effective European and American individual \ninsolvency legislation is founded.<\/p>\n\n\n\n
The LRC has already selected \nthe most imperative and key reforms needed pertaining to the Bankruptcy \nAct 1988. In fact the proposed new act (now titled Draft Personal \nInsolvency Bill 2010) and the old Bankruptcy Act 1988 (which really \nneeds urgent reform and amendment) are so intricately intertwined that \nit makes no sense to pass new laws without at the same time (or as \ncontemporaneously as is possible) amending the old act. <\/p>\n\n\n\n
The \nalterations to the Bankruptcy Act 1988 proposed by the LRC are: to set a\n lowest level of Euro 50,000 to generate a creditor\u2019s petition of \nbankruptcy; to remove the obligation that the insolvent debtor have \navailable assets of at least Euro 1,920 in order to petition for his or \nher own bankruptcy; to empower the court to take into consideration the \ndebtor\u2019s insolvency and to stay proceedings to enable the borrower to \nattempt a Debt Settlement Arrangement (DSA) – as detailed in the new \ndraft act; to set up a Pre-Action Protocol which would apply to a \ncreditor\u2019s petition for bankruptcy and which would oblige the debtor and\n creditors to examine various other possible alternatives such as a DSA \nbefore starting out on the bankruptcy course and empower the court to \nstay bankruptcy proceedings; to empower the court to stay courtroom \nproceedings to look at alternative ways in the case of a debtor\u2019s \npetition for bankruptcy, with similar requirements and powers as under \nthe Pre-Action Protocol; to set in place conditions for the automatic \ndischarge of the bankruptcy, allowing for discharge before all of the \nbankrupt\u2019s property has been realized; to cut down the automatic \ndischarge period of time to three years; to empower the court to order \nrepayments by the bankrupt for up to five years; to establish the powers\n of the court pertaining to discharge and to objections to discharge by \nthe Official Assignee\/Personal Insolvency Trustee; to remove the \nprerequisite to settle costs, fees etc prior to discharge; to scale back\n the quantity of priority debts making certain debts (e.g. Revenue \ndebts) no longer being priority debts; to specify sanctions against \nfraudulent and\/or irresponsible bankrupts, such as restrictions and \ndisqualifications; to exempt resources so as to ensure a fair living \nstandard for the bankrupt; to establish conditions for the appointing \nand accreditation of a new office holder called Personal Insolvency \nTrustee acting in bankruptcy, with the new licensing system overseen by a\n (new) Debt Settlement Office. <\/p>\n\n\n\n
Does the lack of any or all of \nthe above provisions in law represent a breach of the constitutional \nrights of a person looking at bankruptcy? Will government act before it \nis compelled to act by a legal challenge? a legal challenge be long \ndrawn out and have the consequence of unnecessarily slowing down the \nenactment of new laws? There are sure to be legal changes coming down \nthe tracks and the question on most peoples\u2019 lips is when that will be.\n\n<\/p>\n","protected":false},"excerpt":{"rendered":"
A challenge to Ireland\u2019s arcane insolvency regulations may perhaps be made to the High Court within just a few months, as per a newly released report in The Sunday Independent by Maeve Sheehan. <\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"none","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","footnotes":""},"categories":[6],"tags":[],"class_list":["post-12497","post","type-post","status-publish","format-standard","hentry","category-general-debt-articles"],"_links":{"self":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/12497","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/comments?post=12497"}],"version-history":[{"count":1,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/12497\/revisions"}],"predecessor-version":[{"id":12502,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/12497\/revisions\/12502"}],"wp:attachment":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/media?parent=12497"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/categories?post=12497"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/tags?post=12497"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}