The Minster for Justice has published a new bill that aims to reduce the term of bankruptcy from 12 years to five. The bill also provides for an automatic end to bankruptcy after 12 years - a move that will affect some 300 people.
The decision to reduce the bankruptcy term comes ahead of new legislation, expected next year, that will overhaul the personal insolvency regime in Ireland.
Today's changes to the bankruptcy law were inserted into the Civil Law Miscellaneous Provisions Bill, which introduces a raft of changes to various aspects of civil law.
Changing the insolvency regime is part of the EU-IMF programme for Ireland.
Small business group ISME welcomed the news, saying that it hoped this would be a step towards bringing what it called 'our antiquated bankruptcy laws' in line with the UK, where the bankruptcy discharge period can be as short as one year. Chambers Ireland also welcomed the plan.
But the Small Firms Association said the proposal did not go far enough. 'What we need is immediate action by the Minister to separate out legitimate business bankruptcies from consumer bankruptcies, which would enable a one-year automatic discharge for bankruptcy to be workable for the insolvency services,' said SFA director Patricia Callan.
