Back on Track

How do I know if bankruptcy is the right insolvency solution for me?

Bankruptcy is a formal, high court process for people in debt over €20,000. Before you consider applying for bankruptcy you must first have explored the alternative solutions to bankruptcy which are contained in the Personal Insolvency Act 2012, and which are also available on this website. If these alternative solutions are not suitable then bankruptcy could be the right solution for you.

What are the benefits for me?

What does it mean to be declared bankrupt?

When you are declared bankrupt, your property and possessions are transferred to a person called the Official Assignee. He then arranges for those items to be sold and the money generated from the sale is distributed to the people you owe money to your creditors.

Do I have to deal with my creditors?

No, the Official Assignee will deal with your creditors for you, so this will put an end to any demands for unpaid debt – no more calls, letters or visits.

Am I entitled to a reasonable standard of living?

Yes, you are entitled to have a reasonable standard of living. This includes food, clothing, education, healthcare and a modest allowance for savings. Under the ISI model, this means a higher standard than merely living at a subsistence level, which people often exist on when in debt.

What type of debt could be included in a bankruptcy?

Unsecured and secured debt such as mortgages for family homes or buy-to-let properties, business loans and credit card loans can be included in your bankruptcy. Examples of debt that cannot be included would be court fines in respect of criminal offences, or any new debts you accumulate after the date you are made bankrupt.

What are the consequences of bankruptcy? For example, what happens to my family home and other assets?

In bankruptcy, all assets including your interest or share in the family home will transfer to the Official Assignee. While it is a possibility, you should not assume you will lose your family home in bankruptcy.

For a full, in depth guide to the bankruptcy process, please download our bankruptcy booklet here.

How long does bankruptcy last?

Usually, after one year you will be discharged from bankruptcy and all of your debts will be written off. You should then be solvent and able to regain some financial independence.

Who can help me decide if bankruptcy is a solution for me?

A Personal Insolvency Practitioner (PIP) can help you identify the most appropriate option for you. PIPs are part of a network of qualified professional advisors regulated by the ISI and contact details can be found here or by calling the ISI’s information line 076 106 4200.

If you are in arrears on your home mortgage you could be eligible for a free PIP consultation under a new State-funded scheme. For more details on the scheme click here. A list of Personal Insolvency Practitioners participating in the scheme is available here.

Take the first step to getting back on track financially with ISI.

For a short guide to the Bankruptcy, click here. For more detailed information, please see the full Bankruptcy guide here.