Bankruptcy

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.

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.

If you have money left over after what is defined as a reasonable standard of living, you will have to contribute that remaining money to the Official Assignee for a period of up to 3 years and they will transfer it to your creditors. This is known as a ‘Bankruptcy Payment Order’.

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

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.

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.

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.

You are not required to use the services of a solicitor in applying for your bankruptcy; however, it is advisable to seek some professional advice in advance of declaring yourself bankrupt.

If you decide to hire a professional advisor to assist you through the bankruptcy process, you should carry out the same checks as you would when engaging the services of any other professional e.g. are they suitably qualified; regulated by anyone; what are their fees and charges; and are they likely to act in your best interests as opposed to for their own financial gain.

• My spouse/civil partner? If there is equity in the family home (i.e. surplus in the value of your property above the amount of mortgage owed), the Official Assignee will firstly seek to sell what has become their half-share to your spouse or civil partner.
• My business partner? The partnership is automatically dissolved unless the partnership agreement states otherwise. Partnership assets are used to pay partnership debts first; any remaining surplus goes to your personal debts.
• My tenants? The Official Assignee effectively takes over as landlord of any rented property you own. There is no break in the lease, but the ISI will write to the tenant and provide them with new bank account details into which they pay their rent.
• My employees? If you stop trading, your employees are entitled to claim statutory redundancy and outstanding pay entitlements via the Department of Social Protection’s Insolvency Payments Scheme.

More details are available on www.welfare.ie.

• How long will the process last? Bankruptcy normally lasts for 1 year. The term could be shorter if a settlement is reached with your creditors, or longer if you do not fully cooperate or you fail to disclose all necessary details. After discharge from bankruptcy, all your assets that existed at the time of bankruptcy continue to be  owned by the Official Assignee until sold.
• What if my circumstances change? If your financial circumstances change, you must tell the Official Assignee, and the terms of your Income Payment Order may be adjusted. Your financial circumstances will be reviewed periodically throughout your bankruptcy.

At present, all Bankruptcy hearings are held remotely. You should log on with details provided by the Examiner’s Office.

When it is your turn, the Registrar will call out your initials and you should identify yourself. The Judge will usually state that your papers are in order and adjudicate you bankrupt (this means that you have been made bankrupt). The Judge will state that you should advertise your notice of adjudication on the ISI website. This can be done by forwarding the notice to the ISI team managing your case.

The Judge will then move on to the next person on their list, so you are free to leave your remote Court hearing.

On the day you are made bankrupt, any money held in your bank accounts over €1,000 will transfer to the Official Assignee. Your bank accounts may be frozen, with the exception of one current account which you are entitled to keep for everyday living expenses.

During your one-year bankruptcy period, there isn’t any restriction on the amount of money held in your bank account. However, you may be asked to provide bank statements as vouching for your reasonable living expenses as part of your income assessment.

The process is now underway, and you are one step closer to getting back on track financially.

The bankruptcy team managing your case will have already reviewed and validated your Statement of Affairs and supporting documentation. After your adjudication, the team will follow up with you directly with any further questions they may have about the information provided.

You may be asked to attend the ISI office for an interview, and the bankruptcy team may contact you at any time if they require more information.

The bankruptcy team will use your SOA form and supporting documentation to assist them in conducting an income payment assessment and managing your bankruptcy.

An income payment assessment is conducted by the ISI, based on the information you have given them, to determine the correct reasonable living expenses that apply in your case.

When you are made bankrupt, 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.

This assessment will be based on the bankruptcy teams research and enquiries relating to your case and the information you provide in the SPI. The bankruptcy team will work out your reasonable living expenses based on the ISI’s set guidelines.

If you have money left over after what is defined as a reasonable standard of living, you will have to contribute that remaining money to the Official Assignee for a period of up to 3 years, and he will pay it out to your creditors. This is known as a dividend.

• All your unsecured debts are written off.
• The Bankruptcy Division will be in touch with you to administer your bankruptcy.
• Your property and possessions—with the exception of essential assets up to a value of €6,000—are transferred to the Official Assignee. The Official Assignee then arranges for those items to be sold and the money generated from the sale is distributed to your creditors.
• Your creditors can no longer contact you; they must deal with the Official Assignee.
• You have a duty to contribute from surplus income towards your debts for up to 3 years.
• You cannot seek to obtain credit of over €650 without disclosing that you are bankrupt.
• You should inform the Official Assignee if you are going abroad during your bankruptcy term.
• Your circumstances are reviewed periodically.
• You will normally be automatically discharged from bankruptcy after 1 year. This term could be shorter if a settlement with your creditors is reached. However, the period could be longer if you do not fully co-operate or if you fail to disclose all of your property.

Please feel free to contact a member of the bankruptcy team by calling 01 764 4200