Bankruptcy
About Bankruptcy
Much confusion surrounds the area of bankruptcy in Ireland. Even though attitudes to debt have changed rapidly in recent months, there is still a social stigma attached to becoming bankrupt and a misunderstanding as to what it means. First Recovery, Ireland’s leading insolvency and corporate recovery specialists have devised a snapshot summary of what bankruptcy means.
What is Bankruptcy?
Where an individual is unable, or unwilling, to pay their debts, the High Court may transfer their property and assets to a person called a ‘trustee’ or ‘assignee’. Once the assets have been sold, the costs, expenses and court fees are paid, the creditors are paid from the balance of available cash. Bankruptcy proceedings are dealt with by the High Court. As part of the process notice of the Bankruptcy proceedings are advertised in various newspapers. When and why do you become bankrupt? A debtor may petition the High Court to be placed into bankruptcy. In this instance the debtor aims to seek the protection from the court from his creditors and to ensure that outstanding debts are settled in an orderly manner. More likely a creditor would petition the Court to receive payment of a debt. In the current economic conditions, existing director of companies frequently give personal guarantees for debts owed by their companies. Creditors now tend to look to personal guarantees and instituting bankruptcy proceeding against directors. Traditional the legal process to get a debtor into bankruptcy was laborious and this remedy was not frequently utilized. In February 2009, the Supreme Court in Ireland handed down a decision which, in effect, simplified the entire process and this is expected to result in more petitions being brought before the Court. All of the property of the person placed in bankruptcy vests with the trustees and it is his job to sell or dispose of the property for the benefit of the creditors. If the bankrupt is receiving a salary or pension, the High court may appropriate or garnishee both for the benefit of creditors The interest that the Bankrupt has in the family home also vests in the trustee. The trustee must obtain permission from the High Court to sell the family home. The court may authorize or postpone the sale of the property taking into account the best interest of the creditors and of any spouse or dependents of the Bankrupt. A Bankrupt cannot obtain credit of more than €650 without disclosing the bankruptcy.
