The Personal Insolvency Bill has completed its passage through the Dáil and the Seanad (the Irish Houses of Parliament) and will now be passed to the President for signing into law.
The new legislation has been described by the Minister for Justice as “the most radical and comprehensive reform of our insolvency and bankruptcy law and practice since the foundation of the State.”
It provides for:
- The introduction of three new non-judicial debt settlement systems: Personal Insolvency Arrangements; Debt Settlement Arrangements; and Debt Relief Notices
- The establishment of an Insolvency Service to oversee these new non-judicial debt settlement systems and provision for the authorisation of personal insolvency practitioners
- Reforms to the current bankruptcy legislation, including:
- The reduction of the automatic discharge period from 12 years to 3 years, subject to certain conditions
- Increasing to 3 years the review period for certain pre-bankruptcy transactions
The Minister has indicated that the new law will be fully operational by the early part of 2013 and that the new Insolvency Service of Ireland will issue relevant guidelines and publications in the first quarter of the new year.
It is expected that in its first full year of operation the Insolvency Service will process approximately 15,000 applications for Debt Settlement Arrangements and Personal Insolvency Arrangements, plus more than 3,000 applications for Debt Relief Notices. A number of new Specialist Judges will also be appointed to deal with the anticipated volume of work and to facilitate the speedy consideration of insolvency applications.