Ireland needs to continue to work on removing the so called "stigma" of bankruptcy or business failure by modernising its approach to insolvency, Minister for Justice Alan Shatter said this morning.
Speaking at the inaugural conference of the Insolvency Service of Ireland (ISI), which will discuss the development of a new protocol involving practitioners and creditors, Mr Shatter said that some changes to the insolvency regime introduced last year are "inevitable".
Referring to the proposed new protocol, which would provide a template for arriving at an insolvency arrangement, Mr Shatter said that this would ensure, “to the greatest extent possible, a streamlined process surrounding debt solutions under the Personal Insolvency Act.”
Describing such a protocol as in some ways “analogous to what already happens when a person goes to buy or sell a house”, given the ability to draw draw upon a standard contract for sale, Mr Shatter said it makes such as process “faster, simpler and less expensive”.
Mr Shatter also noted that such a protocol for personal insolvency is in line with best practice in other jurisdictions and does not require amendments to existing legislation.
“A similar protocol was developed in the UK for their Individual Voluntary Arrangement which is comparable to the Debt Settlement Arrangement here. The UK protocol, once it was agreed and adopted, resulted in faster decisions and significantly improved acceptance rates. Creditors there accept in excess of 90 per cent of protocol-compliant agreements put to them,” he said.
Mr Shatter also explained that the costs of bankruptcy have declined under the new regime. In December 2013, the approximate costs involved in bringing a bankruptcy petition with regard to monies payable to the Official Assignee, stamp duty and advertising were approximately €1,400. The costs have since fallen to about € 900, a saving of € 500, as a result of the facility to place the notice of bankruptcy cost free on the ISI website.
