News has begun to surface in recent days that the Bankruptcy term in the Republic of Ireland (ROI) may be reduced from three years to one year, to bring Irish bankruptcy law into line with legislation in the UK.
The move for this legislative change is being pioneered by Labour Longford – Westmeath TD, Willie Penrose who has been a long standing critic of current Irish bankruptcy law.
Mr Penrose is reported as stating “This is critical, the current situation where it is three years bankruptcy here and one year north of the Border is rather silly and impractical”.
The less onerous duration in Northern Ireland has led to ‘Bankruptcy Tourism’ in recent years – referring to the practice of ROI residents travelling North to avail of the 12 month UK bankruptcy regime.
Although supported by the Labour party, the Dáil’s Department of Finance has previously opposed any such change, and failed to raise the issue in the Government’s mortgage arrears package earlier in the year.
The Minister for Justice, Frances Fitzgerald may be bringing the proposed legislation change to the Cabinet in the next number of weeks.
James Neill, Managing Director of HNH Group and a Licenced Insolvency Practioner, commented on the proposed change; “This is a potentially ground breaking development in bankruptcy law with a far-reaching impact across both the island of Ireland and UK. It is particularly pertinent when you consider the current stage of our recovering economies, both north and south of the border and has the potential to further stimulate recovery in Ireland”.
With the upcoming Irish general election in the spring of 2016 it will be interesting to see whether this potential legislation change will become a bi-partisan issue supported across the isle or whether it will become an election sticking point that parties will bump heads over.