The Government has agreed on new bankruptcy legislation, according to Joan Burton and she is confident it will be enacted by Christmas.
Minister for Justice Frances Fitzgerald brought the bill to Cabinet today to reduce the bankruptcy period from three years to one year.
For those already in the process, the bankruptcy period will be 18 months.
The bill will also increase the penalties for those who try to hide their assets.
Bankruptcy involves the settlement of a person's debts where they are wholly or partially unable to repay them.
Under the legal process, all debts are written off and all of the assets they own and their surplus income are transferred to an official assignee officer to pay back their creditors.
Under the bill, serious cases of non co-operation will result in their bankruptcy period being extended to up to 15 years. At present the maximum penalty is eight.
Also under the current system, a person may still have to make payments for up to five years after the bankruptcy period expires, however this will be reduced to three years where there is full co-operation.
To deal with any increase in bankruptcy cases and the 600 existing cases already in the system as a result of the new bankruptcy bill, the department of Justice will abolish the statutory hearing that takes place after someone is declared bankrupt.
This will free up court time and result in a reduction in the number of hearings held.
The new bankruptcy bill when enacted will also see an increase in the workload of the official assignee and it is understood he has indicated that he can deal with this within current resources.
Today's development follows a campaign by Labour's Willie Penrose, who introduced his own bill on the issue last March.
Speaking on his way into Cabinet this morning, Minister for Public Expenditure and Reform Brendan Howlin welcomed the proposed changes.
He said it was appropriate to have a one-year period of bankruptcy in the Republic like in Northern Ireland and the UK so people can get over the mistakes of the past and get on with their lives.
Ms Burton also said ministers had discussed the opposition's proposals to resolve the issues that have stalled the IBRC Commission of Investigation.
She said that the Taoiseach would speak to the opposition leaders on the issue.
