Bankruptcy

If you owe a lot of money, own very few assets and can see no way of ever repaying your debts then bankruptcy could be a solution for you. To petition for bankruptcy you must have liquidated debts owing of more than €2000. The bankruptcy discharge period is 12 years.

When you are declared bankrupt all your assets are vested in the name of an Official Assignee who will share out all your assets amongst your creditors.

The fees for bankruptcy are very high and the consequences are very serious. Quite apart from the fact that you could lose your home, it means that you will struggle to obtain credit in the future and certain professions such as Company Director cannot be filled by individuals who have been declared bankrupt.

For these reasons, the decision to go bankrupt should not be taken lightly and you should gain professional help and advice before deciding on anything.

The Bankruptcy Act 1988 provides 2 methods by which someone in debt can make a formal arrangement with his/her creditors:

A private arrangement under the control of the court

This involves you applying for a protection order. You will need to set out the reason why you are unable to pay your debts and request protection from proceedings including bankruptcy. When the protection order has been granted you will need to meet with all your creditors and make an offer of payment to them.

If three fifths of your creditors in number and value agree to accept your offer, it is deemed to be accepted.

This is a court controlled process and necessarily requires a number of court hearings which takes time and money.

A private arrangement outside the court

This is a matter of contract between you and your creditors and needs the support of all your creditors.

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