Some Consequences of Bankruptcy in Ireland

Before looking at the aftermath of consequences of bankruptcy in Ireland lets firstly look at the bankruptcy procedure in general terms to get some background.

Bankruptcy proceedings are all dealt with in the High Court, which has obvious cost implications, and if you are declared bankrupt it lasts until and after your death unless you are discharged.

Getting a discharge from bankruptcy is difficult as you must firstly pay off all charges and costs incurred in making you bankrupt in the first place. In fact before a bankrupt can be discharged he/she must discharge the costs of the petitioning creditor, the High Court fees, the costs of the Official Assignee and any preferential debts of the debtor.

A bankrupt is entered on the bankrupt register which is maintained by the Examiner of the High Court-this cannot be inspected online but can be inspected by paying a small fee and calling in person or writing to the Office of the Examiner of the High Court.

After bankruptcy

After being adjudicated bankrupt the petitioning creditor must advertise this fact in a national and local newspaper. Other advertisements will also be required from time to time such as advertising for creditors to come forward.

Once made bankrupt all property vests in the Official Assignee who then attempts to sell the property.

Consequences of bankruptcy

A bankrupt can operate a bank account and trade in a business under his own name but cannot be a company director; he/she can continue working and/or seek employment.

A bankrupt’s interest in the family home will vest in the Official Assignee when adjudicated bankrupt.
However the Official Assignee can only sell the family home with the approval of the High Court.
Note though that if there is a mortgage or charge on the property only the equity in the property, the unencumbered part, will transfer to the Official Assignee.

A bankruptcy will also cause a joint ownership to split so if the bankrupt owns a family home (or other property) with a partner/wife/husband then the Official Assignee and the non-bankrupt person will hold separate interests in the same property.
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3 thoughts on “Some Consequences of Bankruptcy in Ireland”

  1. A friend has asked me for advice.
    She needs to become bankrupt – her debts exceed her assets by something of the order of half a million euros. She has no prospect of ever repaying such a sum.
    The question she has put to me is how much it will cost her to become bankrupt – the problem being that she has no funds. She wonders whether legal aid is available for petitioning for bankruptcy?
    It seems such an obvious possibility that someone who must become bankrupt should have no funds that I find it hard to believe that it should be a catch 22 situation.
    If you recommend that there is a means of her achieving bankruptcy, I will advise her to contact you directly on her return.
    Thank you for your response,
    Name witheld

  2. Hi
    According to the head of the new insolvency service the cost of becoming bankrupt will be in the region of €750 (source). However that assumes no barrister or solicitor helping or advising or moving the motion in Court and probably only includes the stamp duty fees on the Court documentation. Many people, I would imagine, will struggle to do this for themselves so may require the assistance of a barrister or solicitor.

    So going bankrupt will cost her some money alright and, yes, I recognise the irony!

    But if you think about it-accessing the personal insolvency service is going to cost, and a lot more than €750, and you have to, by definition, be insolvent!
    Terry

  3. What happens to my salary if my husband becomes bankrupt? Can a portion of it be taken? Also, our family home is in negative equity, so what happens there? Thanks for your help.

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