Revised bankruptcy laws will help ordinary joes says penrose

The bankruptcy laws need to be changed to give “ordinary Joes” a helping hand, says Deputy Willie Penrose.

The Labour Party TD is to table a new bill that, if adopted, will reduce the automatic discharge period from bankruptcy from three years to one, and reduce the period for payment orders in bankruptcy to three years.

The bill, which Deputy Penrose worked on with Ross Maguire SC from the New Beginning group, also states that the family home of a bankrupt should return to its former owner if it hasn’t been sold after three years.

Deputy Penrose said it is “about time” that something is done to “try and help out the ordinary people”.

“Under the 1988 bankruptcy act, we had an old fashioned view that if someone failed in an enterprise, they should be condemned to 12 years. There are numerous reasons for failure. Other countries took a more pragmatic view on bankruptcy.”

While the Personal Insolvency Act introduced in 2012 cut the automatic discharge period for bankruptcy from 12 years to three, Deputy Penrose says that it hasn’t led to as many settlements between creditors and debtors as anticipated, and for that reason the discharge period needs to be reduced further.

He predicts that the only groups that will be opposed to his bill will be “the Department of Finance and the banks”.

“What about the ordinary Joe who did their bit? Banks have been the winners up to now and it is time for the ordinary citizen to get a bit of encouragement.

“It’s not people’s fault that the markets fell and the economy collapsed. The economy is showing signs of recovery and this would one of the final pieces of the jigsaw.”

Mr Maguire, one of the founders of New Beginning, said that “for far too long we have failed to deal with the overhang of personal debt”.
“The insolvency system needs a serious injection of pace and dynamism. This can only be achieved by making bankruptcy a viable option for people – once this is done, the banks will do the deals that they should have been doing up to now.

“There is recovery in the economy but it will be held back by personal debt. Deputy Penrose’s bill will mean that personal debt will finally be well and truly dealt with and people can finally move on with their lives.”