Personal Insolvency Law is now regulated by the Personal Insolvency Act 2012 and the Bankruptcy Acts 1988-2012, since December 2012. The most significant change is the introduction of an automatic discharge period of three years. However, it is perhaps not as automatic as it looks when you realise that a further five year ‘Income Payments’ Order may be imposed by the High Court at its discretion on the application of a creditor or trustee. At present no criteria to guide the court as to the circumstances in which such orders might be granted are set out but in principle this is far too penal a provision. Three versus eight years is quite a disparity. An application objecting to automatic discharge from bankruptcy may be made by the Official Assignee or by a trustee on grounds of lack of cooperation, dishonesty or other wrongful conduct of the debtor. If there is sufficient evidence of this, the period of bankruptcy may be extended up to eight years.
There is also a problem in terms of the comparative lengths of the DSA and PIA under the Insolvency Service (www.isi.gov.ie) set up under the new Insolvency Act at five/ six years as opposed to three years for bankruptcy.