The Minister for Justice and Equality, Frances Fitzgerald, has signed an order bringing into force most of the provisions of the Bankruptcy (Amendment) Act 2015.
This includes the reduced bankruptcy term of one year.
As well as reducing the normal duration of bankruptcy from three years to one, the revised act also reduces the normal duration of a bankruptcy payment order from five years to three as well as several other provisions.
Minister Fitzgerald had brought the bill to Cabinet early last month.
"The Act is a significant reform of our bankruptcy laws and reflects a fundamental shift in attitudes towards indebtedness," the Minister stated.
"Our legislation no longer punishes people who, in most cases, through no fault of their own find themselves with intractable debt," she added.
But she cautioned that bankruptcy is still not going to be an easy option.
"People seeking bankruptcy will have to co-operate in an open manner with the bankruptcy process, and hand over their income and assets towards repayment of their debts," she stated.
"The new act also further modernises our bankruptcy system: it will remove unnecessary costs and delays for debtors and creditors, free up court time and resources, and allow more efficient and effective bankruptcy administration," the Minister said.
The Insolvency Service of Ireland today welcomed the the new regime, which comes into force from today.
Lorcan O'Connor, Director of the ISI said "building upon other recent improvements, including a higher debt relief notice threshold, the removal of the 'bank veto' and the new debtor support package, the reduction in the bankruptcy term means that there has never been a better time to take the first step to solvency and a fresh start.
Mr O'Connor encouraged debtors to seek the advice of a Personal Insolvency Practitioner (PIP) or Approved Intermediary (AI).