Recently announced changes to the country’s bankruptcy law will not stem the flood of Irish bankruptcy tourists to the UK, says a leading Leicester-based bankruptcy consultant who claims that his Irish client list has more than trebled from around 30 to just under 100 in the last four months.
Solicitor Steve Thatcher, a bankruptcy specialist who has been processing Irish cases in the UK since last year, has blamed what he calls the “five-year-bite-your-bum” clause in the Personal Insolvency Bill that proposes to allow banks to reapply through the courts for five years of “additional payments” after the initial three-year bankruptcy term expires.
He told the Irish Independent that this effectively turns a three-year bankruptcy into an eight-year term.
“The big problem is this five-year clause. Once you put in your three years as the new legislation demands, then official assignees, usually the receivers, can go to court and ask for five more years of additional repayments.
“In reality that’s a possible eight-year bankruptcy — and because it might take another year for the new legislation to come into being, that’s nine years and by that time, many won’t be able to get their life back in order.”
Mr Thatcher says most creditors will avail of the five-year option.